UK economy avoids recession, shows zero Q4 growth: ONS-Xinhua

UK economy avoids recession, shows zero Q4 growth: ONS

Source: Xinhua

Editor: huaxia

2023-02-11 01:04:02

People walk past promotional signs in Manchester, Britain, Dec. 13, 2022.  (Photo by Jon Super/Xinhua)

After GDP declined in the third quarter, no growth in the year's final quarter meant the economy avoided the most common definition of a recession of two consecutive quarters of declining GDP.

LONDON, Feb. 10 (Xinhua) -- The United Kingdom's (UK) gross domestic product (GDP) was flat in the three months to December 2022, helping the economy avoid a recession for now, official figures showed on Friday.

The services sector slowed to flat output in the fourth quarter driven by falls in the education, transport and storage sub-sectors, and growth of 0.3 percent in construction was offset by a 0.2 percent fall in the production sector, the Office for National Statistics (ONS) said.

After GDP declined in the third quarter, no growth in the year's final quarter meant the economy avoided the most common definition of a recession of two consecutive quarters of declining GDP, according to economist Paul Dales at Capital Economics consultancy.

People walk past a promotional sign in Manchester, Britain, Dec. 13, 2022. (Photo by Jon Super/Xinhua)

"But it was mighty close," Dales said, noting that to two decimal places, the economy grew by 0.01 percent in the quarter, and if GDP had been a little lower, the economy would have contracted and entered a recession.

Monthly GDP is estimated to have fallen by 0.5 percent in December 2022, following an unrevised growth of 0.1 percent in November, the ONS said. The services sector fell by 0.8 percent, and production output grew by 0.3 percent. The construction sector was flat.

In December, public services were hit by fewer operations and general practitioner (GP) visits, partly due to the impact of strikes, as well as notably lower school attendance, ONS Director of Economic Statistics Darren Morgan noted.

A man stands outside a store in Basingstoke, Britain on Nov. 13, 2022. (Photo by Tim Ireland/Xinhua)

Meanwhile, the break in Premier League football for the World Cup and the postal strikes also caused a slowdown, Morgan said, adding that these falls were partially offset by a strong month for lawyers, growth in car sales and the cold snap increasing energy generation.

The UK's annual GDP output is estimated to have grown by 4.1 percent in 2022, following the growth of 7.4 percent in 2021.

"Despite recent squeezes on household incomes, restaurants, bars and travel agents had a strong year. Health and education also began to recover from the effects of the (COVID-19) pandemic," Morgan said. 

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