UK confirmed to have narrowly avoided recession in the fourth quarter of 2022

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As businesses up and down the UK continue to grapple with the challenges and opportunities that 2023 represents, it has recently been confirmed by Office for National Statistics (ONS) data that the UK was fortunate enough to avoid slipping into recession during the fourth quarter of 2022.

The news is sure to be welcomed by many Britons, including business owners making use of TS Partners’ own HMRC help for business in Newton Abbot, Plymouth, and Wellington.

So, what was the story behind the pleasantly surprising news?

It is, of course, important to acknowledge that the UK continues to be going through a time of great economic uncertainty, with much about the coming months remaining far from guaranteed.

And from a numbers perspective, this particular story is about a modest change. Whereas the original estimate for gross domestic product (GDP) between October and December – as was released in early February – was 0% growth, it now turns out that the UK economy achieved 0.1% growth during that time.

It is an unspectacular difference, then, but the revision of the figures serves as confirmation that the UK did not enter recession during the second half of 2022. The economy had already contracted very slightly in the third quarter (originally estimated to be by 0.2%, but now revised to 0.1%), and in the UK, a recession is generally defined as two quarters in a row of falling GDP.

The news could represent a welcome morale-booster for a ‘UK plc’ that has still been buffeted by more than a few challenges as of late, including persistently high inflation and the broader cost-of-living crisis.

“Underlying resilience in the UK economy” – or is recession still on the way?

The ONS said its most recent data suggested that the telecommunications, construction and manufacturing sectors had all performed more strongly over the final three months of 2022 than initially thought.

The national statistics institute also noted that household finances had been bolstered over that period by the Government’s support scheme for energy bills.

It was a combination of factors that heartened Chancellor of the Exchequer Jeremy Hunt, who said that the data showed “there’s underlying resilience in the UK economy”. He acknowledged, however, that families around the UK were still “facing real pressure”.

A further note of caution was sounded by Ruth Gregory of independent economic research business Capital Economics, who signalled that “we still think the economy will slip into a recession this year”.

She said that although the modified ONS figures indicated inflation didn’t exert quite as much downward pressure on the economy during the quarter as first thought, most of the impact of higher bank interest rates was yet to be felt.

Allow TS Partners to put strong foundations of support in place for your business

While there is – of course – only so much that even the most enterprising business owners can do to face down the stiffest challenges of a difficult economic climate, there might still be a lot of things that you can do to enhance your business’s prospects in 2023.

One of those things might be reaching out to TS Partners to ask about our high-quality HMRC help for business in Newton Abbot, Wellington and Plymouth this year.

So, why not enquire today to us via phone or email, to help ensure your firm is in the best possible position to make this year one of its most successful yet?