Britain Enters Another Recession Amid Slow COVID-19 Recovery, Inflation Concerns, and Economic Forecasting Differences

Reuters: Data confirms UK economy entered recession in the previous year

New figures released on Thursday confirmed that Britain’s economy had fallen into a recession in the latter half of the previous year. According to the Office for National Statistics, gross domestic product declined by 0.3% in the fourth quarter and by 0.1% in the third quarter. These figures matched the preliminary estimates that were previously reported.

Despite some improvement at the beginning of 2024, with GDP growing by 0.2% in January and continued growth reported in February and March according to unofficial surveys, Britain’s recovery from the impact of COVID-19 has been slow. Currently, Britain’s economy is only 1% larger than it was in late 2019, making it one of the worst performers among G7 nations.

The Bank of England has indicated that British inflation is nearing a level where they can begin reducing interest rates. The Bank expects the economy to grow by just 0.25% this year, while official budget forecasters are more optimistic, expecting a 0.8% expansion in the economy.

Following the release of this data, the value of sterling against other major currencies remained relatively stable.

Sophia Reynolds

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