UK officially falls into Recession
Considering this is an election year in the UK, this news today is not something that the incumbent Conservative party and especially Rishi Sunak the unelected Prime Minister would have wanted to hear!
This morning the 15th February 2024 it has been widely reported that we have fallen into recession here in the UK ...
Screenshot from my X account of a post from @WatcherGuru that first highlighted to me the news.
What is a recession?
We often hear the term recession to describe the economy of a country, but what actually defines a recession?
**Strange Fact: There is no official definition of a recession in the UK. **
Whilst researching information for this article, I knew the definition I had in the back of my mind!
My definition is the most commonly used definition internationally which is is two consecutive quarters of declining GDP (Gross Domestic Product), and that is generally accepted to be the technical definition of a recession in the UK.
Office for National Statistics (ONS) bulletin
In the UK we have the Office for National Statistics (ONS) who are responsible for compiling economic data and releasing it.
This was duly done this morning in GDP first quarterly estimate, UK: October to December 2023 their latest statistical bulletin.
The major points are as follows:
UK gross domestic product (GDP) is estimated to have fallen by 0.3% in Quarter 4 (Oct to Dec) 2023, following an unrevised fall of 0.1% in the previous quarter.
There we have it, two consecutive quarters where the GDP has fallen. BANG RECESSION TIME...
While the economy has now decreased for two consecutive quarters, across 2023, GDP is estimated to have increased by 0.1% compared with 2022.
The ONS don't like to be the harbinger of doom, so they throw in good points up front. Like although the GDP has fallen it is still ahead compared to 2022.
I should fluffing well hope it is, after all we were still heavily recovering from the COVID pandemic and the Russian invasion of our ally Ukraine.
A picture paints a 1000 words. We can see at a glance two consecutive quarters in the negative zone ie under the 0 line!
Not good news for Sunak
The media as well as social media is full of the story this morning.
It is devestating news for the Prime Minister. The backbone of Sunak's reputation is building the economy.
We all know how hard it is financially in the UK with the cost of living increases having gone beserk.
What will really be galling for him is having this come out in public after the good news received yesterday about inflation.
UK inflation for January 2024 was announced by ONS at 4.0%. This was tremendous news as it was less than forecasted.
It also showed Sunak was getting to grips with the UK ecomony.
Fast forward 24 hours and it will feel as if he has been hit hard in the gonads after being given a chocolate watch for Valentine's Day!
Things are brighter than six months ago as far as I am concerned. Much of what will be felt is still to come. We have the rest of February and March which means heating for your house etc. Will it carry into April I hope not!
I have found recently food prices starting to come down ever so slightly.
Hopefully we have turned the corner as the data generally runs a month late!
How about your country? Are you having a tough time?
Sources and Reference documents
Office for National Statistics (ONS), released 15 February 2024, ONS website, statistical bulletin, GDP first quarterly estimate, UK: October to December 2023
Chart from GDP first quarterly estimate, UK: October to December 2023
All ramblings are from me, the mad Scotsman TengoLoTodo unless otherwise stated, note lead image is generated with AI on pixlr .com from a prompt by me.
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