UK IN RECESSION SINCE COVID-19

According to official numbers revealed on Thursday, the United Kingdom has entered a state of recession, with its weakest GDP performance in years. This setback undermines Prime Minister Rishi Sunak's attempts to create economic growth, coming just months before a national election.

Generally speaking, two-quarters of economic contraction in a row constitutes a recession. A considerable drop in economic activity, encompassing variables like GDP, income, employment, and trade, characterises this era of pervasive economic decline. A recession often results in lower consumer spending, struggling businesses, and higher unemployment rates. Financial instability, decreased production, and decreased investments are frequently linked to recessionary periods.

As per the Office for National Statistics (ONS), there was a 0.1% contraction in the GDP from July to September of 2023, followed by a 0.3% fall in the last three months of 2023. Two-quarters of economic contraction in a row constitute a recession. According to ONS forecasts, the UK GDP expanded by a pitiful 0.1% in 2023. This is the poorest result since 2009, excepting 2020 when the global financial crisis had a significant influence. In 2022, the growth rate was 4.3%.

"Throughout 2023, the overall performance of the economy remained relatively flat," McKeown stated.

Prime Minister Sunak is disappointed by this news because the Conservative Party, which is in power in England, is now running in two local elections. Ahead of the anticipated national election later this year, it might also solidify the opposition Labour Party's advantage in surveys.

The UK economy has done better than many experts had predicted a year ago, when fears of a more severe decline were popular, despite the mild recession. The economy's activity may be boosted by slower inflation and anticipated interest rate reductions later in the year since the leading services sector is already exhibiting signs of recovery.

In January, the annual inflation rate in the UK stayed at 4%. It is much less than the record high of 11.1% attained in October 2022, even if it is still beyond the Bank of England's 2% objective. The ONS said on Wednesday that food inflation dropped from a recent peak of 19.2% in March 2023 to 7%. In addition, food costs dropped this month for the first time in more than two years as compared to the prior one.

It is argued that the UK economy would have doubled by 5% if they decided to stay in the EU. What do you think will happen next to the UK economy?