A recession and higher inflation are also set to be confirmed in a double blow to the economy
- The figures indicate that the inflation rate rose to 4.2% in January, compared to 4% in December
- GDP appears to have contracted by 0.1% in the fourth quarter after a 0.1% contraction in the third quarter.
- A blow to hopes of reviving growth and ending the cost of living crisis
The British economy appears set for a double setback this week – with figures expected to confirm a recession at the end of last year and higher inflation at the start of 2024.
This would deal a blow to ministers’ hopes of reviving growth and ending the cost of living crisis as elections approach.
However, experts believe that the setbacks will be temporary. A business survey, conducted by accountants BDO, indicates that production rebounded again at the beginning of this year to its highest level in 18 months.
Office for National Statistics figures, which will be published on Wednesday, are expected to show that inflation rose to 4.2 per cent in January as energy bills rose, from 4 per cent in December.
Separate Office for National Statistics data on Thursday is expected to show that gross domestic product contracted by 0.1 per cent in the final quarter of last year after a difficult December that saw weak retail sales, public sector strikes and miserable weather.
Flying the flag: The British economy appears to be preparing for a double setback – with figures expected to confirm a recession at the end of last year and inflation to rise at the beginning of 2024.
This comes after the GDP contracted by 0.1 percent in the third quarter.
Two consecutive quarters of negative growth are defined as a recession, and this would be the first since the onset of the pandemic in 2020.
Prime Minister Rishi Sunak admitted in a newspaper interview over the weekend that “we want growth to be higher” but noted that the long and deep recession he feared when he took power has not happened.
Instead, Britain’s performance – despite its slowdown – has so far been far from contracting and has surpassed that of faltering Germany.
Paul Dales, of Capital Economics, said Britain appeared set to enjoy a so-called “soft landing”, meaning lower inflation without the economy collapsing.
He added: “The good news is that any recession will be minimal and may already be coming to an end.”
“We believe the economy will recover over the coming quarters.”
(tags for translation) Daily Mail