The UK is “not out of the woods” despite avoiding a recession by a tiny margin last year, the Chancellor has warned, as economic forecasts for the this year remain grim.
The UK’s economy flatlined in the last three months of 2022, according to new data released on Friday.
The Office for National Statistics recorded 0.0% growth in gross domestic product (GDP) in the fourth quarter.
The ONS said that when counting to two decimal places, the UK eked out a tiny 0.01% growth. The figure might be revised in late March when the ONS looks again.
It came as December’s GDP figures showed that the economy shrunk by 0.5%, in part due to strikes and the Premier League taking a break during the World Cup.
“Meanwhile, the break in Premier League football for the World Cup and postal strikes also caused a slowdown.”
There had been a 17% fall in sports activities and amusement and recreation activities because the Premier League suspended fixtures, the ONS said.
The reduction in GP appointments and operations in December, partly due to strikes, had contributed to a 4.2% fall in the human health activities industry.
Across the year as a whole, the economy grew by 4% as restaurants, bars and travel agents bounced back from the pandemic, the ONS said.
Chancellor Jeremy Hunt said that the UK is “not out the woods yet” and said the country could have some of the best growth prospects in Europe if it sticks to his plan.
“Our economy is more resilient than many feared,” he said.
“If we stick to our plan to halve inflation this year, we can be confident of having amongst the best prospects for growth of anywhere in Europe.”
Shadow chancellor Rachel Reeves said she hopes that the data will wake up the Government.
Speaking to broadcasters during a visit to Bolton, Ms Reeves said: “I hope today’s numbers are a wake-up call to the Government because the economy now is just flatlining along the bottom.
“The Government now urgently need to put in place a real plan for economic growth, as well as tackling the cost-of-living crisis that is affecting so many families and pensioners right now.”
Separate statistics from the ONS also showed that the annual deficit in the UK’s foreign trade widened by £85.3 billion to £108 billion in 2022 when compared to the year before.
A large part of this was due to the soaring cost of energy. The value of the goods and services that the UK imported rose by nearly a third (32.5%), the ONS said.