In 2023, Britain’s economy grew by just 0.1%, marking its weakest performance since 2009 following the global financial crisis. Despite this disappointing growth, there are some positive signs for the economy at the outset of 2024, with GDP expanding by 0.2% in January from December and recent surveys indicating continued growth in February and March.
The Bank of England has suggested that British inflation is nearing a point where they can start cutting interest rates. They expect the economy to grow by 0.25% this year, whereas official budget forecasters anticipate a 0.8% expansion. The exchange rate for the Sterling remained relatively stable against the U.S. dollar and the euro following the release of the economic data.
However, despite these positive trends, Britain has been slow to recover from the impacts of the COVID-19 pandemic, with the economy only 1% larger than it was in late 2019. Official figures have confirmed that Britain’s economy slipped into a shallow recession last year, presenting a challenge for Prime Minister Rishi Sunak to reassure voters about the state of the economy before an upcoming election.
The Office for National Statistics reported that Gross Domestic Product (GDP) contracted by 0.1% in the third quarter and 0.3% in the fourth quarter of last year, remaining in line with initial estimates. These figures are disappointing for Sunak, who is facing criticism from Labour Party leader Keir Starmer for overseeing what they call “Rishi’s recession.”
Despite these challenges, there are some signs that consumers are cautiously optimistic about their financial future as households’ real disposable income increased by 0.7% compared to
