The U.K. narrowly avoided entering a recession in 2022, but remains in a tight spot, according to new figures from the Office for National Statistics (ONS) released today.
There is a recession when the economy shrinks for two consecutive quarters. But according to the ONS’ first quarterly estimate, the British economy did not grow or contract during the last three months of 2022, after shrinking by 0.2 percent from July to September.
The British government quickly jumped on the news, with Chancellor of the Exchequer Jeremy Hunt saying in a statement today that the numbers showed that the U.K. economy was “more resilient than many feared.”
Yet, regardless of the data, 2023 will still feel like a recession for many, the National Institute of Economic and Social Research (NIESR) has warned, as the British population experience the effects of the most severe cost-of-living crisis the country has ever seen, amid soaring inflation, borrowing costs and energy bills.
“A focus on the economic crisis faced by most of the British population, rather than technicalities, offers a more insightful perspective,” NIESR economist Paula Bejarano Carbo told POLITICO’s London Playbook.
According to NIESR predictions, one in four households in the U.K. — as many as seven million families — will not be able to fully pay off their food and energy bills in 2023-24 — up from one in five in the previous year.
