The UK economy entered a recession at the end of last year due to reduced consumer spending, strikes by doctors, and decreased school attendance, resulting in a larger-than-expected 0.3% contraction between October and December. This marks two consecutive quarters of economic decline, raising doubts about Rishi Sunak's ability to fulfill his pledge to grow the economy. Despite a modest 0.1% growth for the whole of 2023, the weakest annual figure since 2009, Sunak's promise remains unmet. Other economic challenges include the European Union narrowly avoiding recession and Japan experiencing contraction. The Office for National Statistics identified several areas of economic weakness, including decreased December spending after Black Friday sales, doctor strikes, and reduced school attendance. Gross domestic product (GDP) is a critical measure of economic activity, influencing government policies and public perceptions. Jeremy Hunt is considering increased public spending cuts to offset rising interest costs on government borrowing. Hunt emphasizes the importance of tackling inflation before focusing on economic growth, noting resilience in employment and rising real wages. While wage growth has slowed, it still outpaces price rises, although inflation remains above the Bank of England's target. Economists view the recession as mild, with some optimism for a turnaround, particularly in sectors like construction. Despite challenges, there are signs of improvement, with increased inquiries suggesting a potential upturn in economic fortunes.
https://www.bbc.co.uk/news/business-68285833
No comments:
Post a Comment