The U.K. economy slipped into a technical recession in the final quarter of last year, initial figures showed Thursday.
The Office for National Statistics said U.K. gross domestic product shrank by 0.3% in the final three months of the year, notching the second consecutive quarterly decline.
U.K. followed Japan into recession at the end of last year, contrasting with a buoyant U.S. economy and leaving the Bank of England with a tough call as it decides when to start easing monetary policy.
Gross domestic product contracted by 0.3% between October and December, Office for National Statistics figures showed Thursday, a sharper decline than expected by economists polled by The Wall Street Journal. Following a contraction of 0.1% in the previous three-month period, the dip means the country entered recession, defined generally as two successive quarters of falling output.
Sunak made growing the economy one of five key pledges last year. However, the ONS figures show that the UK stagnated in his first full year as prime minister. Fourth quarter GDP was down 0.2% compared to a year earlier and growth was just 0.1% in 2023 as a whole.
The UK economy has been being hamstrung by the worst cost-of-living crisis in generations and a rapid rise in interest rates that squeezed borrowers. Industrial action in the rail and health sectors and a plunge in retail sales contributed to another fall in GDP in December.