“While the UK now has the unwanted tag of being in recession, this owes more to temporary factors, including strike action suppressing output in December, than the wider economic pain you typically associate with technical downturns.
“Though the shallowness of this recession provides comfort, these figures also confirm that our economy remained locked in a cycle of persistent stagnation throughout 2023 as a myriad of headwinds, including high inflation, weighed heavily on activity.
“Although more recent indicators suggest that the UK will probably exit recession this quarter, our economy is in a challenging period, with the lagged impact of earlier interest rate rises likely to continue squeezing GDP for some time.
“A struggling economy makes next month’s Budget trickier because it means lower tax revenue for the government, while these downbeat figures will also raise concerns that the Bank of England have overdone the interest rate rises.”
ENDS
Notes to editors:
Contact: ICAEW media office, 07557 161315 or ruth.pott-negrine@icaew.com