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• The United Kingdom again stands on the brink of technical recession - its second in a year.
• The UK released its GDP figures today for its three-month average for the months of September to November.
• The three month average showed a 0.3 percent drop in GDP for the country.

The United Kingdom released its GDP figures this morning for its three-month average for the months of September to November 2023.

Although monthly GDP grew by approximately 0.3 percent in November itself, the three-month average of the three months from September to November 2023 showed GDP fell by 0.2 percent, more than market expectations of a 0.1 percent drop.

This follows the 0.3 percent drop in GDP from August to October 2023.

Recession looming

Should the three months of October to December (Q4 of 2023) also show negative growth, this will be the first full quarter that the economy has shrunk since clawing its way out of a technical recession earlier this year. Two such quarters will officially put the UK in a technical recession (i.e. two full consecutive quarters of contraction).

According to the Office for National Statistics (ONS), the Q1 growth rate for 2023 was 0.4 percent, then contracting marginally by 0.1 percent and remaining flat at 0.3 percent in both Q2 and Q3. This is after the country’s GDP fell dramatically for five consecutive quarters, from 11.4 percent growth in Q1 2022 to 0.3 percent in Q2 2023.

Should Q4 figures show a 0.2 percent growth as the current figures suggest, it leaves the possibility of the UK entering a technical recession – if not an all-out recession – very high for the rest of 2024.

The broken-down figures at a glance

• Monthly GDP figures for November 2023 grew by 0.3 percent
• The UK’s production output grew by 0.3 percent
• Services output grew by 0.4 percent, while construction fell by 0.2 percent

A not-so-slow slowdown

The UK’s GDP has been slowly declining for some time. In December, the ONS said that the UK’s GDP was estimated to have fallen by 0.1 percent from July to September 2023 and that Quarter Two was now believed to have had no growth after initially receiving an estimate of 0.2 percent growth.

Then, also in December, the ONS said that GDP was estimated to have fallen by 0.3 percent in October 2023, after also falling by 0.2 percent in September, to give a revised quarterly estimate of zero growth from August to October.

Some hope on the horizon 

While the quarterly figures so far are grim, there is potentially hope in November’s monthly figures. While October showed worrying slowdowns in production (down a steep 1.3 percent), construction (down 0.4 percent in October), and services (down 0.1 percent), all three of these figures grew in November, most notably services.

Should December’s figures likewise show improvement, it may spark hope that GDP could grow in Q1 of 2024, saving the UK from its second technical recession in less than a year.

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