Ekonomické zprávy

UK economy continued to contract in the 4th quarter

Data published by the Office for National Statistics (ONS) showed that GDP fell by 0.3% in the 4th quarter, confirming economists' forecasts, but accelerating compared to the 3rd quarter (-0.1%). Thus, the data confirmed that the British economy entered a recession in the second half of last year. GDP is estimated to have increased by an unrevised 0.1% in 2023, following growth of 4.3% in 2022. Excluding the year 2020, which was affected by the coronavirus pandemic, this is the weakest annual change in real GDP since the financial crisis in 2009. 

The ONS said that in the 4th quarter, services, production and construction all contributed negatively to growth. The services sector is estimated to have fallen by 0.1%, following a fall of 0.2% in the 3rd quarter. The production sector is estimated to have fallen by 1.1%, following no growth in the previous quarter. Construction output fell 0.9%, following growth of 0.6% in the 3rd quarter. Across 2023 as a whole, both services and construction grew by 0.3% and 2.1%, respectively, while there was a 0.4% fall in production output. Meanwhile, consumer-facing services fell by 0.4% (previously 0.7% fall) in the 4th quarter and this was largely driven by falls in food and beverage service activities and retail trade, except of motor vehicles and motorcycles. This follows a fall of 0.7% (previously a 1.0% fall) in consumer-facing services in Q3. 

The data also showed that there was a fall in the volume of net trade, gross capital formation, and household consumption in the 4th quarter, partially offset by an increase in government consumption. Real household expenditure fell by 0.1% after a 0.9% decline in the 3rd quarter, while real government consumption expenditure increased by 0.1% (revised from -0.3%). Gross fixed capital formation (GFCF) is estimated to have increased by 0.9% (previously estimated as an increase of 1.4%), following an unrevised fall of 1.4% in the 3rd quarter.

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