Yahoo Finance UK recession – live: Reeves says Britain trapped in cycle of ‘decline’ as Sunak’s economy pledge ‘in tatters’
Britain is trapped in a cycle of decline and Rishi Sunak’s pledges to boost the economy are now “in tatters”, Labour’s shadow chancellor Rachel Reeves has warned, as the UK fell into recession.
The Office for National Statistics (ONS) revealed on Thursday a 0.3 per cent decline in gross domestic product (GDP) between October and December 2023.
The gloomy official figures mean the economy entered a technical recession, as defined by two or more quarters in a row of falling GDP, for the first time since amid the pandemic in the first half of 2020.
The news deals a blow to the prime minister, who has promised to grow the economy as one of his five priorities, especially after most economists were only forecasting a 0.1 per cent decline in GDP.
In comments Labour suggested were “out of touch”, chancellor Jeremy Hunt said low economic growth is “not a surprise”, but added that the UK must “stick to the plan – cutting taxes on work and business to build a stronger economy” despite tough times for many families.
Key Points
Labour’s Rachel Reeves says PM’s promise to grow the economy is in ‘tatters’
Britain trapped in cycle of decline, warns shadow chancellor
UK recession confirmed by gloomy GDP figures in blow for Sunak and economy
Chancellor Jeremy Hunt says UK must ‘stick to the plan’ to combat inflation
‘Stagnation nation’ Britain’s growing population hiding impacts of recession – expert
UK technically in recession last year, statistics set to reveal
Wednesday 14 February 2024 18:26 , Jane Dalton
Welcome to our live blog on the UK economy.
The UK is believed to have slipped into recession at the end of last year after a weak December for the country’s economy, official figures are set to show.
The Office for National Statistics (ONS) is predicted to reveal that the UK economy contracted for the second quarter in a row in the final three months of 2023.
Most economists are forecasting a 0.1% decline in gross domestic product (GDP) between October and December.
This would follow a 0.1% contraction in the previous three months, after a downward revision against the zero growth initially estimated.
A contraction in the fourth quarter would mean the UK tipped into a technical recession, as defined by two or more quarters in a row of falling GDP.
The Bank of England has held interest rates at 5.25% four times in a row.
Economy thought to have been weak last year
Wednesday 14 February 2024 18:37 , Jane Dalton
Official figures for the fourth quarter of last year are also expected to show that the economy was weak last year as a whole.
ONS estimates suggest it did not grow at all between April and June, before shrinking between July and September, which has left the UK at risk of recession in the final three months.
Economy is flat at best, says Bank chief
Wednesday 14 February 2024 19:20 , Jane Dalton
Bank of England governor Andrew Bailey has signalled that a recession, if confirmed, would be likely to be brief, telling a Lords committee on Wednesday the economy was beginning to pick up.
Mr Bailey told the House of Lords Economic Affairs Committee: “In our February Monetary Policy Report, it was in the balance – we didn’t have a recession in the forecast, but it is at best flat, in the view we took.
“It wouldn’t take much to tip it either way, frankly.
“Going forward – and I think this is in some ways more significant – we are now seeing some signs of the beginning of a pick-up in some of the surveys, for instance … we’ve got a modest pick-up this year which continues thereafter.”
Inflation surprises experts by holding steady
Wednesday 14 February 2024 20:30 , Jane Dalton
UK inflation defied expectations to hold steady at 4% in January as lower food prices helped offset increases in energy costs, official figures show. Economists had expected a rise to 4.2%:
UK inflation holds steady at 4% in January as lower food prices help offset higher energy costs
Workers ‘set to benefit from tax cut and wage growth'
Wednesday 14 February 2024 22:00 , Jane Dalton
Workers are likely to start feeling better off despite a short-lived recession, say experts.
Ellie Henderson, an economist at Investec said: “Our base case is that the economy probably did tip into a recession, although this would be in the mildest of senses: a better description of the trend might be stagnation.”
Investec is pencilling in a 0.1% contraction in the fourth quarter, with weak retail data dragging on the all-important services sector and leading to a 0.3% fall in output in December.
Ms Henderson added: “In all, we expect that it was a tough end to the year for the UK economy, but 2024 is likely to have got off to a better start as household budgets look to have loosened a little.
“Indeed, the decline in inflation combined with still high wage growth will continue to drive real household disposable incomes higher, a key factor behind the expected recovery this year.
“There will also be the added lift to post-tax incomes from the 2p cut to employees’ National Insurance Contributions, effective from January 6 – and, in all likelihood, more to come in the March Budget.”
London shares soar
Wednesday 14 February 2024 23:00 , Jane Dalton
Shares in London soared on Wednesday after new official inflation figures were lower than economists had expected, increasing the chance of a Bank of England rate cut in months to come.
The FTSE-100 rose 56.12 points, or 0.75%, ending the day at 7,568.4, as retailers and housebuilder Persimmon joined the bottler of Coca-Cola close to the top of the index.
The inflation rate was 4% in January, the same as the month before, but traders celebrated because economists had expected a rise to 4.2%.
“The past 24 hours have been full of surprises, and this morning’s UK inflation data certainly caught markets on the hop,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“Rapid deceleration in price growth has hit the pound hard, as it seems a Bank of England rate cut has become a much more likely event in the first half of the year.
“This has helped the FTSE-100 to outperform other indices today, though of course it lags far behind on a longer-term view.”
UK likely to have slipped into recession, experts say
00:01 , Jane Dalton
UK likely to have slipped into recession, experts say
Britain to suffer highest inflation in G7, says OECD
01:00 , Jane Dalton
Britain to suffer highest inflation in the G7 in 2024 and 2025, OECD
From inflation to growth, how Sunak is doing on his five pledges
02:00 , Jane Dalton
From inflation to growth, how is Rishi Sunak doing on his five pledges
Inflation expected to drop, says Bank chief
03:30 , Jane Dalton
A technical recession may further add to the case for an interest rate cut, with the Bank of England already indicating it is more a case of when, not if, a reduction will come.
Bank of England governor Andrew Bailey said that inflation remaining unchanged “leaves us broadly where we thought we were going to be”.
Asked whether he thought the UK could be stuck with inflation at its current 4% level, he reiterated that the rate was expected to return to the 2% target by the spring, according to its own forecasts.
“It looks like we’re going to have quite a leg down between now and April-May time,” he said.
Recession would add to PM’s worries amid by-elections
05:00 , Jane Dalton
If the UK tipped into recession in December, it will add to Rishi Sunak’s woes as voters go to the polls in two parliamentary by-elections:
By-elections: Peter Bone girlfriend aims for Wellingborough as Kingswood faces axe
PM insists debt set to fall despite official prediction of rise
06:00 , Jane Dalton
PM insists debt is ‘on schedule’ to fall despite challenges over the claim
Recap: Brexit costs UK up to 5% of GDP a year
07:00 , Jane Dalton
An associate professor at the London School of Economics says Brexit is costing the UK between £75bn and £125bn each year – the equivalent of 3 per cent to 5 per cent of GDP:
The Brexit bill: £100bn hit to UK exports as toy and jewellery sales slump
UK recession confirmed by gloomy GDP figures in blow for Sunak and economy
07:05 , Tara Cobham
The UK has slipped into recession in a blow to Rishi Sunak and the economy.
The Office for National Statistics (ONS) revealed on Thursday that the UK economy has contracted for the second quarter in a row in the final three months of last year.
The gloomy official figures confirm a 0.3 per cent decline in gross domestic product (GDP) between October and December.
It follows a 0.1 per cent contraction in the previous three months, after a downward revision against the zero growth initially estimated.
A technical recession is defined by two or more quarters in a row of falling GDP.
The news deals a blow to the prime minister, who has promised to grow the economy as one of his five priorities.
GDP is estimated to have fallen in October to December (Quarter 4):
▪️ services fell (-0.2%)
▪️ construction fell (-1.3%)
▪️ production fell (-1.0%)
➡️ https://t.co/gsheUbREuI pic.twitter.com/r7xi4Eokhu— Office for National Statistics (ONS) (@ONS) February 15, 2024
Labour says the prime minister’s promise to grow the economy is in ‘tatters'
07:16 , Zoe Grunewald, Political Correspondent
Labour has said the prime minister’s promise to grow the economy is in “tatters” following the news this morning that the UK has slipped into recession, reports political correspondent Zoe Grunewald.
The shadow chancellor Rachel Reeves has responded to the latest figures showing that the UK economy has entered a technical recession: “Rishi Sunak’s promise to grow the economy is now in tatters.
“The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than fourteen years of economic decline under the Conservatives that has left Britain worse off. This is Rishi Sunak’s recession and the news will be deeply worrying for families and business across Britain."
She added: “It is time for a change. We need an election now to give the British people the chance to vote for a changed Labour Party that has a long-term plan for more jobs, more investment and cheaper bills. Only Labour has a plan to get Britain’s future back.”
ONS figures in more detail
07:21 , Tara Cobham
The Office for National Statistics (ONS) today confirmed a 0.3 per cent decline in gross domestic product (GDP) between October and December 2023.
Services declined by 0.2 per cent
Meanwhile, construction shrank by 1.3 per cent
And production fell by 1 per cent
Chancellor says UK must ‘stick to the plan’ to combat recession despite tough times
07:26 , Tara Cobham
Mr Hunt has said low economic growth is “not a surprise”, but implored the country to “stick to the plan – cutting taxes on work and business to build a stronger economy” despite tough times for many families.
Reacting to the latest GDP figures the Chancellor said: “High inflation is the single biggest barrier to growth which is why halving it has been our top priority. While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.
“But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low.
“Although times are still tough for many families, we must stick to the plan – cutting taxes on work and business to build a stronger economy.”
Lib Dembs blame ‘years of Conservative chaos’ for ‘Rishi’s recession’
07:31 , Zoe Grunewald, Political Correspondent
The Liberal Democrats have blamed “years of Conservative chaos and a revolving door of Conservative chancellors” for what they call “Rishi’s recession” following this morning’s bleak news, reports political correspondent Zoe Grunewald.
Liberal democratic leader Ed Davey has said the Conservative government is responsible for the UK entering a technical recession: "Rishi's recession has savaged the British economy by decimating growth and leaving families to cope with spiraling prices. Years of Conservative chaos and a revolving door of Conservative Chancellors has culminated in economic turmoil.
"It's hardworking Brits forced to pick up the tab for this mess, through high food prices, tax hikes and skyrocketing mortgage bills.
He added: "This year the country will have the chance to kick out this incompetent and out of touch government once and for all."
‘This brings to a close a stagnant year for UK economic growth,’ says business interest group
07:35 , Tara Cobham
A business interest group has said today’s news the UK has fallen into recession “brings to a close a pretty stagnant year for UK economic growth”.
Anna Leach, deputy chief economist at the Confederation of British Industry (CBI), said: “December’s GDP number suggests that the UK narrowly fell into a technical recession in the second half of the year. This brings to a close a pretty stagnant year for UK economic growth.
“The CBI’s most recent surveys suggest this year has started better than last year ended, with expectations for services and manufacturing in positive territory and the drag from higher interest rates expected to diminish.
“Better-than-expected real earnings growth will support consumers against the headwind of higher interest rates. But firms remain under pressure from higher borrowing costs, higher prices, weak demand and ongoing challenges recruiting the workers they need to grow and invest.
“There are multiple growth opportunities across the UK economy this year. As we head towards the Budget in March, we’re looking for action to support labour market participation and investment so that opportunities in high-growth industries like net zero can be fully realised.”
Figures should be a ‘wake-up call’ for ministers, says think tank
07:36 , Tara Cobham
The UK’s latest GDP figures should be a “wake-up call” for ministers, a left-leaning think tank has said.
Pranesh Narayanan, research fellow at the Institute for Public Policy Research (IPPR), said: “This time last year, the Prime Minister pledged to get the economy growing but today’s data, showing a mild technical recession, shows a stark lack of progress.
“Chronic underinvestment in hospitals, schools, net zero and infrastructure has created a crumbling public realm and a broken economy.
“This should be a wake-up call that spurs the Government to prioritise public investment rather than irresponsible tax cuts. Let’s fix our problems now rather than storing them up for later.”
In pictures: ONS releases latest figures revealing UK has fallen into recession
07:39 , Tara Cobham
UK in recession after bigger-than-expected year-end contraction – ONS
07:40 , Tara Cobham
Britain’s economy slipped into a recession at the end of 2023 after output contracted by more than expected in the final three months, according to official figures.
The Office for National Statistics (ONS) estimated that gross domestic product (GDP) fell by 0.3% in the fourth quarter, following a decline of 0.1% in the previous three months.
It means that the economy entered a technical recession, as defined by two or more quarters in a row of falling GDP.
Holly Williams reports:
UK in recession after bigger-than-expected year-end contraction – ONS
‘All main sectors fell on the quarter,’ explains ONS director of economic statistics
07:47 , Tara Cobham
All the main sectors fell on the quarter, the ONS director of economic statistics has said as she explained the latest figures.
Liz McKeown, ONS director of economic statistics, said: “Our initial estimate shows the UK economy contracted in the fourth quarter of 2023.
“While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat.
“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth.”
‘It’s very tough out there,’ says Federation of Small Businesses chairman
07:50 , Tara Cobham
Martin McTague, national chairman of the Federation of Small Businesses (FSB), said news of the technical recession “will just confirm what many small firms have been saying for some time now – it’s very tough out there”.
He added: “Our research found that confidence among small firms has been in negative territory for seven straight quarters, due to the energy price crisis and the knock-on impact on the cost of doing business.
“There are big differences between sectors, with the hospitality sector recording by far the gloomiest confidence score, underlining that economic pain and strain are far from equally spread out.
“Small firms are grappling with high interest rates, energy costs much greater than they were a couple of years ago, and weak consumer demand. Two in five small firms said their revenues decreased over the final quarter of last year, with only a third saying they increased, showing that the shine has definitely come off the so-called ‘golden quarter’, to small firms’ detriment.
“The Government needs to foster an environment where small firms can grow, to the overall benefit of the economy, and to put this period of stagnation and shrinkage behind us once and for all.
“We have set out an ambitious but achievable programme for small business growth at the forthcoming Budget.”
Economy in ‘dire straits’ after ‘years of Tory stagnation’, says TUC chief
07:55 , Zoe Grunewald, Political Correspondent
The Trade Union Congress’ General Secretary Paul Nowak has today said that the UK economy is in “dire straits” after “years of Tory stagnation”.
He added: “The Conservatives’ economic failures are hitting jobs and living standards. With household budgets at breaking point, spending is down and the economy is shrinking. At the same time our crumbling public services are starved of much-needed funding.
“After being in power for 14 years, the Tories have driven our economy into a ditch and have no idea how to get out.
"It’s time for a government with a serious long-term plan and strategy for renewal, to revive our economy and sustain growth into future.”
‘News will not be front of mind for millions already in unjustifiable hardship,’ says economist
08:00 , Tara Cobham
Joseph Rowntree Foundation chief economist Alfie Stirling said: “Today’s news that the economy entered a technical recession is concerning, but it will not be front of mind for the millions already in unjustifiable hardship.
“Fridges are either off or empty as already eye-watering food prices continue to rise. Loan and mortgage repayments are being missed as elevated interest rates crush family finances. And jobs are increasingly at risk as the labour market continues to deteriorate.
“Just weeks before the Budget, addressing this crisis of economic security, from individual families to the nation as a whole, must be the first priority for policymakers. This starts with reforming Universal Credit to reflect the actual cost of essentials, and a revitalisation of key services across care, housing, and job support.
“There is no quick fix. Business investment may be the lifeblood of a growing economy, but social security and public services provide the heartbeat.”
Labour suggests Chancellor ‘out of touch’ after comments on recession
08:03 , Tara Cobham
Labour suggested Jeremy Hunt’s comments on the UK entering technical recession meant the Chancellor was “out of touch”.
A spokesperson for the Labour Party said: “Jeremy Hunt’s comments are as insulting as they are out of touch.
“The Conservatives’ failure to take any responsibility for Rishi’s recession show why we need an election.”
Chancellor Jeremy Hunt said low economic growth is “not a surprise”, but added that the UK must “stick to the plan – cutting taxes on work and business to build a stronger economy” despite tough times for many families.
Hunt insists prioritising tackling inflation is ‘right thing to do'
08:28 , Andy Gregory
Jeremy Hunt has insisted it is the “right thing to do” to prioritise tackling inflation, after the UK slid into technical recession.
The chancellor told broadcasters: “We always expected growth to be weaker while we prioritised tackling inflation, that means higher interest rates, and that is the right thing to do because you can’t have long-term healthy growth with high inflation.
“But also for families when there is a cost-of-living crisis, when the cost of their weekly shop is going up, their energy bills are much higher, it is the right thing to do.
“The underlying picture here is an economy that is more resilient than most people predicted, inflation is coming down, real wages have been going up now for six months.
“If we stick to our guns, independent forecasters say that by the early summer we could start to see interest rates falling and that will be a very important relief for families with mortgages.”
Video report: UK officially in recession after latest GDP figures
08:29 , Andy Gregory
Growing population hiding fact UK economy hasn’t grown since 2022, expert says
08:39 , Andy Gregory
Britain is a “stagnation nation”, with a growing population hiding the impacts of recession, a think tank has warned.
“Britain has fallen into recession, and a far deeper living standards downturn. Even this weak data is flattered by a rising population,” said James Smith, research director at the Resolution Foundation.
“After accounting for population growth, the UK economy hasn’t grown since early 2022, and fallen far behind its pre-cost-of-living crisis path, with an equivalent loss of around £1,500 per person.
“The big picture is that Britain remains a stagnation nation, and that there are precious few signs of a recovery that will get the economy out of it.”
Last time UK entered recession was during first Covid lockdown
08:50 , Andy Gregory
The new figures mark the first time the UK has entered recession since the first half of 2020, when the initial Covid lockdown sent the economy plunging into reverse.
Economists said the recession is likely to be short-lived, with GDP expected to pick up from the start of 2024.
But the figures are damning for prime minister Rishi Sunak, who has vowed to grow the economy as one of his five priorities.
Japan loses title of world’s third-largest economy with unexpected slip into recession
09:09 , Andy Gregory
Germany has overtaken Japan as the world’s third-largest economy after the latter unexpectedly slipped into recession, as it struggles with a weak yen and an ageing population.
Japan’s GDP fell an annualised 0.4 per cent in the quarter to December after a 3.3 per cent slump in the previous quarter, government data showed on Thursday, confounding market forecasts for a 1.4 per cent increase.
When not adjusting for inflation, Japan’s nominal GDP stood at $4.21trn in 2023, falling below $4.46trn for Germany to rank as the world’s fourth largest economy, the data showed, more than a decade after falling behind China.
The recession raises questions over whether Japan will further delay a much-anticipated decision to raise the cost of borrowing, after a decade of ultra-loose monetary policy, having brought in a negative interest rate in 2016 in a bid to boost spending and investment, but which has weakened the yen.
‘Overly dramatic to label economic decline a recession,’ says economist
09:40 , Andy Gregory
Economist Samuel Tombs from Pantheon Macroeconomics insists it is “overly dramatic to label the decline in economic activity in the second half of 2023 a recession, given that employment continued to rise, real wages rebounded and measures of business and consumer confidence returned to levels consistent with rising activity by the end of the year.”
He said there was also a good chance that revisions to economic data by the ONS may see the recession avoided in the end.
He said: “We expect quarter-on-quarter growth in gross domestic product to average 0.3 per cent in 2024, driven by a pick-up in households’ real expenditure.
“The [Bank of England’s] Monetary Policy Committee, therefore, needn’t panic that the economy weakened at the end of last year and can proceed with its plans to cut Bank Rate only gradually this year.”
Sunak presiding over longest unbroken record of financial decline for families since records began – Labour
09:56 , Andy Gregory
Rishi Sunak has presided over the longest unbroken record of financial decline for families since records began, Labour’s shadow chief secretary to the Treasury has claimed.
“Given that Rishi Sunak promised the economy would be growing, the fact we are now in recession shows that his plan has failed, and the Conservative Party has run out of ideas for turning it around,” Darren Jones told Times Radio.
“But if you look under the bonnet of these datasets this morning, you’ll see that GDP per head has been declining quarter-on-quarter across the whole of the last year.”
“So people in their family finances have been feeling a huge pinch for the last year to 18 months, which as I understand is the longest unbroken record in family financial decline since the 1950s when records began,” he added.
This is Rishi's recession and it’s working people who will pay the price.
A recession is two quarters of decline.
But families have now suffered from *seven* quarters of decline - the longest period of decline on record.
It’s time for change.
pic.twitter.com/ToCTnSU1u4— Darren Jones MP (@darrenpjones) February 15, 2024
Full report: Labour says Sunak’s promise to grow economy ‘in tatters’ as UK slips into recession
10:11 , Andy Gregory
Labour’s shadow chancellor Rachel Reeves has lambasted the government as the UK economy has officially entered a technical recession.
Labour said the announcement shows the prime minister can “no longer credibly claim that his plan is working”, and that “Rishi Sunak’s promise to grow the economy is now in tatters”.
Our political correspondent Zoe Grunewald has the full reporthis morning’s developments:
Labour says Sunak’s promise to grow economy ‘in tatters’ as UK slips into recession
Pound falls in wake of new economy figures
10:18 , Andy Gregory
The pound fell after figures showed the UK fell into recession, following a weaker-than-forecast contraction in the final three months of 2023.
Sterling was 0.1 per cent down at $1.26, and was also 0.1 per cent lower at €1.17.
Case for Bank of England to cut base rate now even stronger, says economist
10:31 , Andy Gregory
Chancellor Jeremy Hunt still has room to pursue tax cuts, while the case for an early cut to the Bank of England’s base interest rate is now even stronger, a right-wing think-tank has insisted.
“There are plenty of excuses for the weak GDP data – many other countries have also slipped into recession, the numbers may be revised, and leading indicators are already improving, said Julian Jessop, of the Institute of Economic Affairs.
“But the news is bad enough that it should have some implications for policy too.
“In particular, the Bank of England expected the economy to be flat in the fourth quarter of last year. On top of a downward revision to GDP in the first quarter, this means that the economy is already 0.4% smaller than assumed in the February Monetary Policy Report.
“The MPC’s job is to worry about inflation, not growth, but the case for early rate cuts is now even stronger.
“There will also be more pressure on Jeremy Hunt to cut taxes in the spring budget. The chancellor needs to be careful here. There is already some additional stimulus from the cuts in National Insurance in January and from the increases in pensions, benefits and the national minimum wage in April.”
Mr Jessop warned that the increase in interest rates was a “key driver of the slump into recession” and urged the chancellor to avoid reigniting inflation, adding: “But there is room for some well-targeted tax cuts that would both support demand and boost the productive potential of the economy.”
Watch: Hunt insists Tory party ‘must stick to our guns’ as UK falls into recession
10:55 , Andy Gregory
Rachel Reeves: ‘You don’t need a recession to bring down inflation'
11:35 , Andy Gregory
You don’t need a recession to bring down inflation, shadow chancellor Rachel Reeves has said.
Ms Reeves said: “I don’t buy this argument that you need to have a recession to get inflation down, other countries are doing an awful lot better at controlling inflation whilst also managing to grow their economy, which is the point that I made about Britain being acutely exposed to the challenges that we face.
“I just do not accept this premise that this was what was needed to control inflation.”
UK is trapped in cycle of decline, warns Rachel Reeves
11:36 , Kate Devlin, Politics and Whitehall Editor
Rachel Reeves has used a press conference to says today’s ONS figures are “deeply worrying news for families trying to make ends meet” and that the UK is trapped in a cycle of “decline”.
Rachel Reeves: ‘Does anything in UK work better since Tories came to power?’
11:42 , Kate Devlin, Politics and Whitehall Editor
At a press conference on today’s economy figures, shadow chancellor Rachel Reeves appeared to update the old political question asked before elections – do you feel better off than five years ago?
Today she asked: “Does anything in country work better than when the Conservatives came to power 14 years ago?”
Reeves also rejected the idea that the recession is a consequence of getting inflation under control.
“I don’t buy this argument that you need a recession to get inflation down”, she said. “Other countries are doing this an awful lot better than we are in the UK”
Reeves accuses Jeremy Hunt of ‘dangerous’ hints on his upcoming Budget
11:44 , Kate Devlin, Politics and Whitehall Editor
Labour’s shadow chancellor Rachel Reeves has accused Jeremy Hunt of dropping “dangerous” hints over his upcoming Budget.
Ms Reeves said: “I find it extraordinary that the chancellor is providing a running commentary on his own budget”.
She called it “dangerous and very misguided” and urged him to stop, warning he was creating “uncertainty we … don’t need”.
UK is ‘most certainly’ in a recession, says shadow chancellor
11:46 , Andy Gregory
Rachel Reeves said the UK was “most certainly” facing a recession, after attempts to play down fears from the chancellor.
At a press conference, Labour’s shadow chancellor said: “These were worse numbers than economists were predicting. This is a recession.
“But we didn’t need to get these numbers for us to know that families are struggling through an enormous cost of living crisis and businesses are struggling as well.
“As [former Marks and Spencer chair] Stuart Rose said on the radio this morning, if it quacks like a recession, it is a recession and this is most certainly a recession.”
Hunt says his Budget will focus on ‘prioritising economic growth’ – after fall into recession
12:09 , Andy Gregory
Jeremy Hunt has insisted his upcoming Budget will be focused on “prioritising economic growth”, after being questioned about rumours he could cut public sector spending to fund lower taxes, as the government seeks to garner political favour with voters ahead of a general election.
Asked about the reports by Sky News, Mr Hunt said he would not break with convention and speak about the Budget in the weeks preceding it.
But the chancellor did hint at his preference for tax cuts, suggesting that countries with “lighter taxes” did “tend to grow faster”.
He added: “But I would only cut taxes in a way that was responsible, and I certainly wouldn’t do anything that fuelled inflation just when we are starting to have some success in bringing down inflation.”
Recession figures ‘don’t paint true picture of suffering’ in UK, poverty campaigner warns
12:29 , Andy Gregory
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said of the new fuel poverty figures: “Even these terrible figures don’t paint the true picture of the suffering in households across the UK.
“They exclude millions of homes in certain energy performance categories and also don’t include many people who actually get a Warm Home Discount to help with their bills.
“The numbers of households paying more than 10 per cent of their income on energy is truly shocking, far exceeding previous estimates.”
And he said: “The reality is that household energy debt is now at record levels, millions of people are living in cold, damp homes and children are suffering in mouldy conditions.
“The wider impact of high energy bills is also clear to see with households having to cut back on spending so much that the UK has now entered a recession.”
Reeves defends Starmer’s handling of antisemitism row
12:55 , Kate Devlin, Politics and Whitehall Editor
Rachel Reeves has defended Keir Starmer’s handling of the antisemitism row that engulfed Labour this week, saying he had not let her down.
The senior frontbencher said Labour would have taken action over comments made by Azhar Ali and Graham Jones “sooner” if it had known about them and the party had intervened “swiftly”.
She also told a press conference in central London: “I only returned to the shadow cabinet because I was sure of Keir Starmer’s commitment to that (rooting out antisemitism) and he hasn’t let me down, he hasn’t let the Jewish community down, and it is right that both of them have been suspended.
“In terms of the vetting procedure, my understanding is that this was a private meeting, not a Labour Party meeting, and the recording was released much later.
“Obviously if we’d have known about these things we would have taken action sooner.
“We can’t see everything everywhere, but when we do see evidence of antisemitism, we act swiftly to ensure the highest standards and rightly so amongst our MPs and amongst our parliamentary candidates.”
What does Britain being in a recession mean?
13:26 , Andy Gregory
While a severe recession typically causes unemployment to rise, Britain’s technical recession serves more as an indicator of the pressure households and firms are already under – and as a blow to the government’s promises to boost economic growth.
The gloomy economic data is also likely to ramp up pressure on the Bank of England to start cutting interest rates from their 14-year high of 5.25 per cent, given the threat to the wider economy from painfully high borrowing costs.
You can read more about what the latest economic data means below:
What does Britain being in a recession mean?
Tory former chancellor says room for tax cuts in Budget
14:04 , Andy Gregory
Tory former chancellor Lord Lamont said he thought there was room for tax cuts in the March Budget.
He told BBC Radio 4's World at One: “I do think tax cuts have to be responsible. I think there is probably some headroom that has been created by very strong growth in tax revenues, particularly as a result of the freezing of the tax thresholds for such a long period.
“There may be some headroom. I think looking longer term though, any tax cuts have to be matched by tight control of public spending, probably financed by reductions in public spending.”
On the outlook for the UK after it slipped into recession, Lord Lamont said: “I think people ought to be realistic about this. We have an almost perfect storm. We are coming through it, I think there is light at the end of the tunnel now and we just need to hold our nerve.”
Public services ‘on their knees’, says Rachel Reeves
14:19 , Andy Gregory
Labour’s Rachel Reeves said public services are “on their knees” and need an immediate injection of cash.
The shadow chancellor said: “I do recognise that our public services are under huge pressure – unlike perhaps the Conservatives do – which is why I said there does need to be an immediate injection of cash into our public services.”
She added: “If our economy had grown at the rate of other OECD countries these last 14 years, our economy would be £150bn bigger, worth £5,000 for every family in the UK and we would have tens of billions of pounds of additional tax receipts which we would be able to invest in our public services.
“That’s why it’s so important that we grow our economy.”
Rachel Reeves insists Labour’s plans to grow economy differ significantly from government’s
14:38 , Andy Gregory
Rachel Reeves rejected suggestions that Labour’s economic plans to grow the economy were not much different from the government’s.
Asked at a press conference about the plans, the shadow chancellor said: “I reject entirely that there is little difference between what Labour and the Conservatives offer.
“We have got a comprehensive plan for growth that has been drawn up with business.”
She pointed to planning reforms, as well as plans to invest in a £7.3bn national wealth fund, and new publicly owned energy company, Great British Energy, among the steps Labour had set out in its plans.
Jeremy Hunt insists Tory party 'must stick to our guns' as UK falls into recession
15:01 , Andy Gregory
Tory election leaflet claiming economy is growing ‘delivered on day of recession data’
15:32 , Andy Gregory
Voters have received an election leaflet boasting about the economy growin under the Conservatives on the day it emerged the UK had slipped into a recession, according to the Daily Mirror.
Flyers for justice secretary Alex Chalk were delivered to residents in Cheltenham, telling them to “take a look at the facts: we're making progress and strengthening our economy”.
It adds: “Economy GROWING. Official GDP data shows that the UK economy has grown more than Germany, France and Italy when recovering from the pandemic. That means more jobs, more investment and a better standard of living.”
From mortgages to childcare: What does the recession actually mean for you?
16:37 , Andy Gregory
For those wondering what impact the impact of entering a recession could be, Abi Jackson looks at the latest economic data from the perspective of childcare, driving, food prices and more in this explainer:
From mortgages to childcare: What does the recession actually mean for you?
James Moore | The ‘Rishession’ could not have come at a worse time for Sunak
17:41 , Andy Gregory
In his latest column, The Independent’s chief business commentator James Moore writes:
Economists spent much of last year discussing the dreaded R-word, and whether the UK could avoid recession. Now we have the answer: it could not.
But how much does this “short, technical recession” really matter? Andrew Bailey, the governor of the Bank of England got in early, and for days has been playing down its significance ... Of course, Bailey has skin in the game here. The Bank’s rate setting Monetary Policy Committee, on which he serves, is facing pressure to reduce interest rates. Small businesses, in particular, are screaming.
Politically, it is more significant still. This could not have come at a worse time for Rishi Sunak, with an election looming ever larger. His opponents will seek to pin the blame for the downturn on him – it’s already been branded the ‘Rishession’… – and use it as a stick to beat the Tories’ record on the economy.
The latter is always a key battleground. In past epochs, it has been seen as a Tory strength. This time, not so much.
Should we be worried by the ‘Rishession’… and is Brexit to blame?
More than three million households in fuel poverty in 2023, figures show
18:40 , Andy Gregory
Some 3.17 million low income households were struggling to pay their energy bills to heat draughty homes in 2023, official figures show.
In England, official statistics consider a household to be in fuel poverty if their home has a poor energy efficiency rating of band D or below and their disposable income after housing and fuel costs is below the poverty line.
The data from the Department for Energy Security and Net Zero shows 13 per cent of households in England were in fuel poverty last year, largely unchanged from 13.1 per cent in 2022.
The figure would have been more than 3.5m households in fuel poverty without government support including energy bill payments and the cost-of-living income payments given to people on low incomes, the data showed.
The data also reveals well over a third of households (36.4 per cent) or some 8.91 million were forced to spend more than 10 per cent of their income, after housing costs, on domestic energy bills, up from 6.66 million in 2022.
Emily Beament has the full report:
More than three million households in fuel poverty in 2023, figures show
Video report: UK officially in recession after latest GDP figures
19:09 , Andy Gregory
