The United Kingdom and Japan have entered recessions, marked by GDP declines in the final quarter of 2023.
The UK’s GDP fell by 0.3% from October to December, following a 0.1% decrease in the third quarter, reports the Office for National Statistics. This mild recession, the gentlest onset since the 1970s, resulted in a 0.5% shrinkage for the year, contrasting with more significant contractions in previous recessions.
Despite sector-wide contractions — services by 0.2%, production by 1%, and construction by 1.3% — optimism remains due to a robust job market and wages rising faster than inflation. The GDP did see a marginal 0.1% year-on-year growth in certain areas.
Chancellor Jeremy Hunt views the economy as on the mend, though he acknowledges current low growth. In contrast, shadow chancellor Rachel Reeves criticizes Prime Minister Rishi Sunak’s economic growth promises as unfulfilled.
The European Union and Germany narrowly avoided recession, with Germany’s economy contracting by 0.3% in the last quarter.
Japan, overtaken by Germany as the world’s third-largest economy, also entered recession. Its GDP decreased by an annualized 0.4% in the last quarter of 2023, after a 3.3% fall in the preceding quarter, surprising analysts who had anticipated growth.
