On Thursday, official figures were released that confirmed Britain’s economy had entered a recession in the second half of last year. The Office for National Statistics reported that Gross Domestic Product (GDP) had contracted by 0.1% in the third quarter and by 0.3% in the fourth quarter, remaining unchanged from the initial estimates. Despite some signs of improvement at the start of 2024, with GDP growing by 0.2% in January and unofficial surveys indicating continued growth in February and March, Britain has been slow to recover from the impacts of the COVID-19 pandemic. As a result, the economy is currently only 1% larger than it was in late 2019, making it one of the worst performing economies within the Group of Seven nations.
The Bank of England has stated that British inflation is approaching a level where interest rate cuts can be implemented. The central bank predicts that the economy will only grow by 0.25% this year, while official budget forecasters anticipate a 0.8% expansion in the economy. Following the release of the data, the value of the British pound remained relatively stable against both the U.S. dollar and the euro.
