The UK financial system stagnated within the closing quarter of 2022, narrowly avoiding a recession regardless of output shrinking by greater than anticipated in December.

Gross home product was unchanged between the third and fourth quarters of 2022, following a contraction within the earlier three months, in line with information printed on Friday by the Workplace for Nationwide Statistics.

That was in step with analysts’ expectations however was weaker than the 0.1 per cent enlargement anticipated by the Financial institution of England.

Two consecutive quarters of falling output are normally known as a technical recession.

The quarterly determine was boosted by progress in October and November. Nonetheless, the financial system shrunk by 0.5 per cent between November and December as widespread strikes and the price of dwelling disaster hit family funds and enterprise exercise. The studying was decrease than the 0.3 per cent contraction forecast by economists polled by Reuters.

Darren Morgan, ONS director of financial statistics, stated: “In December, public providers had been hit by fewer operations and GP visits, partly as a result of impression of strikes, in addition to notably decrease faculty attendance. In the meantime, the break in Premier League soccer for the World Cup and postal strikes additionally prompted a slowdown.”

Within the fourth quarter, the UK financial system was nonetheless 0.8 per cent under the extent in the identical interval of 2019, earlier than the pandemic. In distinction, the US financial system was up by 5.1 per cent over the identical interval and output within the eurozone grew by 2.4 per cent.

The Financial institution of England expects the UK financial system to contract this 12 months and within the first quarter of subsequent 12 months, as excessive vitality costs and better borrowing prices weigh on spending. Output won’t get well to its pre-pandemic ranges till 2026, in line with its calculations.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, expects output to fall within the first half of this 12 months as shopper confidence is low, the federal government is pausing its price of dwelling grants, and lots of companies are reducing prices and suspending new tasks in response to the rise of their borrowing prices. “The recession has been delayed, not averted,” he stated.

Chancellor Jeremy Hunt stated that “avoiding a recession exhibits our financial system is extra resilient than many feared”.

“Nonetheless, we aren’t out of the woods but, significantly in the case of inflation,” he added.