Official figures have shown that people spending less, doctors’ strikes, and a fall in school attendance all contributed to the UK’s recession at the end of last year. The economy shrank by 0.3% between October and December, following a contraction between July and September. The UK enters recession if it fails to grow for two consecutive quarters.
There have been questions as to whether Chancellor Rishi Sunak met his January pledge to grow the economy. The government has not disclosed what measure should be used to determine if this has been achieved. Some private briefings have suggested that a larger economy between October and December than the previous three months would meet the target. However, this measure has not been fulfilled as the economy shrank by 0.1% in July to September.
Shadow chancellor Rachel Reeves says Mr. Sunak’s pledge is “in tatters,” with the economy growing only by 0.1% in 2023. The European Union and Japan have also faced economic pressure, narrowly avoiding recession and contracting for a second quarter, respectively.
The Office for National Statistics has identified several areas where the economy faltered at the end of last year. Shoppers spent less in December after utilizing Black Friday sales in November, while the health sector was affected by striking junior doctors and school attendance dropped by 1%.
Gross domestic product (GDP) is a significant measure of all economic activity in a country. It suggests that the government is managing the economy well if GDP grows steadily, leading to more tax revenue and higher spending on public services. However, growing GDP is not enough, and governments must also monitor how much they are borrowing in relation to the size of the economy
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