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UK economy slid into recession in Q4 last year

Larger-than-expected dip in economic activity set to pile pressure on PM Sunak

15 February 2024

Amid a raft of economic releases in the UK this morning the one that will grab the headlines is the not-too-surprising fact that the UK economy fell into a technical recession in the fourth quarter of 2023. Gross Domestic Product (GDP) fell 0.3% in the quarter compared to three months earlier, slightly worse than estimates of a 0.1% fall.

However, hopes for the Bank of England to hit the emergency rate cutting pedal may be unwarranted. The economy has likely recovered a bit from the middle of last quarter’s malaise according to recent data and it is still the Bank’s focus to squash inflation, almost at the expense of economic growth. The adage of voters getting the government they deserve seems frivolous, but this is the slow to no-growth post-Brexit alternate universe we find ourselves in, despite Prime Minister Sunak’s failed pledge to grow the economy. Today’s twin by-elections will show whether the Tories can defend their seats or whether voters really have had enough.

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Charles Hepworth

Investment Director
My Insights

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