UK GDP Falls 0.2% YoY in Q4

The British economy contracted by 0.2% year-on-year in the fourth quarter of 2023, marking its first period of shrinkage since the 2020-21 recession, primarily driven by high inflation, soaring borrowing costs, and sluggish external demand.

Notably, net trade exerted downward pressure on GDP, with exports plunging by 7.6% for a second consecutive quarter of decline, while imports fell by 1.5%, marking the fourth consecutive quarter of decrease.

Meanwhile, household consumption saw a slight increase of 0.3% (vs 0.2% in Q3), and fixed investment grew by 0.5% (vs 0.1% in Q3), bolstered by a notable 2.8% surge in business investment.

Furthermore, government consumption growth accelerated to 2.5% from 1.9%.

Looking at the full year of 2023, the economy expanded by a meager 0.1%.

This followed a robust growth rate of 4.3% in 2022, marking the weakest annual growth since the 2009 financial crisis, excluding the pandemic-hit year of 2020.