In 2023, the U.K. economy slid into a “technical” recession, with the Office for National Statistics (ONS) releasing data on Thursday showing a 0.3% decline in GDP for the final quarter of the year. This followed a 0.1% downturn in growth in the third quarter. The opposition Labour Party swiftly seized upon the news as grounds to vote out Rishi Sunak’s Conservative government in the upcoming elections later this year.
Labour leader Keir Starmer criticized Rishi Sunak, stating that he had failed to reverse 14 years of Tory economic decline. Starmer asserted that only Labour could deliver the necessary change. The ONS reported declines in construction, production, and services in the final quarter of 2023. Overall, the U.K. economy saw growth of just 0.1% in 2023 — the weakest performance since the 2009 financial crisis, excluding 2020 when the pandemic began.
The Labour Party’s shadow chancellor declared that Sunak’s economic growth plan was now in ruins. Sunak had made “Growing the economy” one of five promises in January 2023 to boost his party’s flagging poll prospects.
Ahead of the elections, Chancellor Jeremy Hunt is anticipated to implement tax cuts in the upcoming Budget scheduled for March 6. Reportedly, these tax reductions are funding cuts to public services, which are already facing significant challenges.
However, Hunt emphasized the importance of responsible tax cuts, stating in an interview with Sky News on Thursday that he did not want to disrupt inflation levels, which have decreased since last year. Despite the latest GDP figures, Hunt insisted that the economy was “more resilient” than initially predicted, pointing to declining inflation rates and increasing real wages.