After stagnating in the final three months of 2022, the British economy managed to avoid a recession, but finance minister Jeremy Hunt cautioned on Friday that the country was “not out of the woods yet” due to rising inflation.
The Office for National Statistics (ONS) reported that the gross domestic product shrank by 0.3 percent in the preceding three months and had zero growth in the fourth quarter, which was expected.
Despite decades-high inflation, the economy grew by 4.1 percent overall last year, according to the ONS, following growth of 7.4 percent in 2021.
Sky-high consumer prices have sparked a cost-of-living crisis and widespread industrial action across Britain.
“We are not out the woods yet, particularly when it comes to inflation,” Hunt said, but also noted that “our economy is more resilient than many feared”.
The technical definition of a recession is two straight quarters of negative growth.
The UK economy shrank by 0.5 percent in December, but this was offset by growth in the prior two months.
“In December public services were hit by fewer (hospital) operations and … visits (to see doctors), partly due to the impact of strikes, as well as notably lower school attendance,” said ONS economic statistics director Darren Morgan.
“Meanwhile, the break in Premier League football for the World Cup and postal strikes also caused a slowdown.”