UK economy barely avoids recession – Politico

The UK has avoided entering recession in 2022, but remains in a tough spot, according to new figures from the Office for National Statistics (ONS) published today.

A recession occurs when the economy shrinks for two consecutive quarters. But the British economy neither grew nor contracted in the final three months of 2022, after shrinking 0.2 per cent from July to September, according to the ONS’s first-quarter estimates.

The British government was quick to pounce on the news, with Chancellor of the Exchequer Jeremy Hunt saying in a statement today that the numbers show the UK economy is “more resilient than many feared.”

Yet, regardless of the data, 2023 will still feel like a recession for many, the National Institute of Economic and Social Research (NIESR) has warned, as the British population feels the effects of the country’s most severe crisis in living standards. Rising inflation, borrowing costs and energy bills never seen before.

“A focus on the economic crisis facing the majority of the British population, rather than technicalities, provides a more insightful perspective,” NIESR economist Paula Bezzarano Carbo told POLITICO’s London Playbook.

NIESR forecasts that one in four UK households – 7 million households – will not be able to pay their food and energy bills in full in 2023-24 – up from one in five the previous year.