LONDON (AP) 鈥� The British economy stagnated in the final three months of last year as the country struggled under the weight of a that is squeezing household budgets, crimping business investment and .
The Office for National Statistics said Friday that gross domestic product, the broadest measure of economic activity, failed to grow during the fourth quarter of 2022. Monthly estimates suggest that economic activity slowed at the end of the year, with output shrinking 0.5% in December.
However, the figures showed that Britain dodged a second consecutive quarter of contraction, which is one definition of a recession. Britain doesn鈥檛 have an independent body that and Europe, where official panels use a variety of economic data, including unemployment and consumer and business spending, to make their assessments.
While the U.K. avoided a 鈥渢echnical recession,鈥� strikes by train drivers, and other public-sector workers added to the slowdown in December, said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
鈥淭he U.K. is facing a particularly , stealth tax rises and the lagged impact of numerous interest rate hikes still likely to push us into a summer downturn by hammering incomes and confidence,鈥� Thiru said.
Overall, the economy expanded 4% for the year, more than any other member of the Group of Seven advanced economies.
But that growth occurred in the early part of the year, before Russia鈥檚 invasion of Ukraine sparked .
Inflation in the U.K. remains at levels last seen in the early 1980s, and crimping business investment. from a year earlier after peaking at 11.1% two months earlier.
In an effort to slow inflation, the 10 times since December 2021, increasing the cost of mortgages, credit cards and business loans.
The National Institute of Economic and Social Research warned earlier this week that 2023 will 鈥渃ertainly feel like a recession,鈥� as persistent inflation, slow growth and rising taxes squeeze household incomes.
About one in four U.K. households 鈥� some 7 million families 鈥� from their post-tax income in the 2023-24 financial year, up from one in five in 2022-23.
The International Monetary Fund last month forecast that the U.K. would be the , even as the outlook for the rest of the world improves.
Amid the gloom, Treasury chief Jeremy Hunt chose to focus on the growth in the U.K. economy over the whole of 2022, which he said showed .
鈥淗owever, we are not out the woods yet, particularly when it comes to inflation," Hunt said. 鈥淚f we stick to our plan to halve inflation this year, we can be confident of having amongst the best prospects for growth of anywhere in Europe.鈥�
Danica Kirka, The Associated Press
