The UK economy narrowly avoided a recession in the back half of 2022 despite a slump in December, the latest figures show.
The figures, released by the Office for National Statistics (ONS), revealed that the UK economy had grown by 0.7% in the third quarter of 2022, just avoiding a recession by the narrowest of margins.
The ONS said that the UK economy had been hit by a series of strikes in December, which had caused a sharp dip in economic activity.
However, the ONS said that the UK had managed to avoid a recession due to a strong performance in the services sector, which had grown by 1.2%.
The news comes as a relief to the UK government, which had feared that the economy could slip into recession in 2023.
The FTSE 100 index, however, slid as worries about interest rates persisted. Standard Chartered reversed its gains, with analysts citing the uncertainty over the UK’s economic outlook as a factor.
The news of the UK’s narrow escape from recession has prompted many to ask what a recession actually is and how much it matters that the UK avoided one.
A recession is defined as two consecutive quarters of negative economic growth. It can lead to job losses, wage cuts, and a fall in living standards.
It is clear that the UK has been lucky to avoid a recession in the back half of 2022, but the outlook for 2023 remains uncertain.