Britain’s Economic Recovery Stalls as Official Figures Confirm Recession

Official 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 0.1% in the third quarter and by 0.3% in the fourth quarter. These figures matched the preliminary estimates that were previously reported.

While the economy saw 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, the recovery from the impact of the COVID-19 pandemic has been slow. Currently, Britain’s economy is only 1% larger than it was in late 2019, with Germany being the only G7 nation with a worse performance.

Despite this slow recovery, there is hope for improvement as 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, there was little movement in currency exchange rates as investors remained cautious about future economic prospects due to ongoing uncertainty around COVID-19 and its impact on global economies.