It is a big blow for Prime Minister Rishi Sunak as the UK economy has slipped into a recession in the last two quarters of 2023. The UK saw a 0.3 percent decrease in GDP in quarter four and a 0.1 percent decrease in quarter 3. Although many experts believe this recession will be short-lived, it's a big set back for Sunak as he placed economic growth as a key priority. This is also a time when a new election is coming up and the conservatives badly trail the main opposition Labour party in the polls.
Other data shows that the the labour market remains strong and the unemployment rate is close to its historical low. Jeremy Hunt, finance minister, said the reason for such low growth is the inflation rate, which is about 4 percent and double their target rate. The interest rate also sits at a 16 year high of 5.25%, which has caused millions of voters to struggle to pay their mortgages, and has caused them to demand a change in government.
2 comments:
Very interesting article; are there any other underlying reasons why the economy has slowed? If so, this could be a possible point of attack for the government. It will be interesting to see if there is a new leader in the UK what they will do to tackle this difficult problem.
Not surprising as the Uk's economy has taken a productivity downturn since its European Union departure, mixed with their shakey economic policy that has led to the complete turnover of a political regime.
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