The economy narrowly avoided recession in the second half of last year, according to early official figures, despite growth going into a sharp reverse in December partly due to the impact of strikes and lack of Premier League football.
The Office for National Statistics (ONS) reported that output between October and December was flat at 0%.
A negative figure would have met the technical definition of a recession because the economy contracted over the previous three months to September as the cost of living crisis took a heavy toll on consumer spending.
Economic activity has stalled largely as a result of energy-led price pressures on households and businesses – with the Bank of England even predicting in November last year that the economy was already likely in recession.
The narrow miss, which is subject to revision by the ONS when more data becomes available, reflects an economy that is stagnating at best in the face of a continuing squeeze on spending power.
Output in December fell by 0.5% compared to the previous month, the ONS said, with contributions to the decline also coming from some early winter snow disruption and strikes including the Royal Mail dispute.
Businesses had reported a drop in orders due to delivery uncertainties across the month.
The report also pointed to a negative impact from the World Cup, having credited strong bar sales for lifting output during November.
Image: Premier League football was suspended throughout much of December because of the World Cup in Qatar
ONS director of economic statistics, Darren Morgan, said of the performance: “The economy contracted sharply in December meaning, overall, there was no growth in the economy over the last three months of 2022.
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“In December public services were hit by fewer operations and GP visits, partly due to the impact of strikes, as well as notably lower school attendance.
“Meanwhile, the break in Premier League football for the World Cup and postal strikes also caused a slowdown.
“However, these falls were partially offset by a strong month for lawyers, growth in car sales and the cold snap increasing energy generation.
“Despite recent squeezes in household incomes, restaurants, bars and travel agents had a strong year. Meanwhile, health and education also began to recover from the effects of the pandemic”.
Economists widely believe that recession during the first half of this year is inevitable, with the International Monetary Fund predicting last month that the UK would be the worst performer in the developed world including sanctions-hit Russia.
However, others have argued that a recession could be avoided despite continued pressure on budgets from inflation.
The government’s critics are urging the chancellor to use his spring budget next month to boost activity, accusing him of taking a miserly approach to the public finances.
Unions, for example, argue that public sector pay settlements to avert further strikes would contribute to growth but the Treasury, and Bank of England, is worried that inflation-busting pay deals will stoke inflation.
Jeremy Hunt said in response to the ONS figures: “The fact the UK was the fastest growing economy in the G7 last year, as well as avoiding a recession, shows our economy is more resilient than many feared.
“However, we are not out of the woods yet, particularly when it comes to inflation.
“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.”
Four people have been charged after £7m of damage was caused to two Voyager aircraft at RAF Brize Norton.
The investigation into the incident early on Friday 20 June was led by counter-terror police.
They have been charged with conspiracy to enter a prohibited place knowingly for a purpose prejudicial to the safety or interests of the UK – and conspiracy to commit criminal damage.
Image: Two Voyager aircraft at RAF Brize Norton were damaged. PA file pic
The four charged have been identified as:
• Amy Gardiner-Gibson, 29, of no fixed abode
• Daniel Jeronymides-Norie, 35, from London
• Jony Cink, 24, of no fixed abode
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• Lewie Chiaramello, 22, from London
They will appear at Westminster Magistrates’ Court later today.
A 41-year-old woman arrested last week on suspicion of assisting an offender has been released on bail until 19 September.
Meanwhile, a 23-year-old man detained on Saturday was released without charge.
Last month’s incident at RAF Brize Norton in Oxfordshire was claimed by the activist group Palestine Action.
Rachel Reeves has not offered her resignation and is “going nowhere”, Downing Street has said, following her tearful appearance in the House of Commons.
A Number 10 spokesperson said the chancellor had the “full backing” of Sir Keir Starmer, despite Ms Reeves looking visibly upset during Prime Minister’s Questions.
A spokesperson for the chancellor later clarified that Ms Reeves had been affected by a “personal matter” and would be working out of Downing Street this afternoon.
UK government bond prices fell by the most since October 2022, and the pound tumbled after Ms Reeves’s Commons appearance, while the yield on the 10-year government bond, or gilt, rose as much as 22 basis points at one point to around 4.68%.
Tory leader Kemi Badenoch branded the chancellor the “human shield” for the prime minister’s “incompetence” just hours after he was forced to perform a humiliating U-turn over his controversial welfare bill.
Emotional Reeves a painful watch – and reminder of tough decisions ahead
It is hard to think of a PMQs like it – it was a painful watch.
The prime minister battled on, his tone assured, even if his actual words were not always convincing.
But it was the chancellor next to him that attracted the most attention.
Rachel Reeves looked visibly upset.
It is hard to know for sure right now what was going on behind the scenes, the reasons – predictable or otherwise – why she appeared to be emotional, but it was noticeable and it was difficult to watch.
Speaking at Prime Minister’s Questions, Ms Badenoch said: “This man has forgotten that his welfare bill was there to plug a black hole created by the chancellor. Instead they’re creating new ones.”
Turning to the chancellor, the Tory leader added: “[She] is pointing at me – she looks absolutely miserable.
“Labour MPs are going on the record saying that the chancellor is toast, and the reality is that she is a human shield for his incompetence. In January, he said that she would be in post until the next election. Will she really?”
Not fully answering the question, the prime minister replied: “[Ms Badenoch] certainly won’t.
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2:58
Welfare vote ‘a blow to the prime minister’
“I have to say, I’m always cheered up when she asks me questions or responds to a statement because she always makes a complete mess of it and shows just how unserious and irrelevant they are.”
Mrs Badenoch interjected: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”
A total of 49 Labour MPs voted against the bill – the largest rebellion in a prime minister’s first year in office since 47 MPs voted against Tony Blair’s Lone Parent benefit in 1997, according to Professor Phil Cowley from Queen Mary University.
After multiple concessions made due to threats of a Labour rebellion, many MPs questioned what they were voting for as the bill had been severely stripped down.
They ended up voting for only one part of the plan: a cut to Universal Credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
Ms Badenoch said the climbdown was proof that Sir Keir was “too weak to get anything done”.
Ms Reeves has also borne a lot of the criticism over the handling of the vote, with some MPs believing that her strict approach to fiscal rules has meant she has approached the ballooning welfare bill from the standpoint of trying to make savings, rather than getting people into work.
Experts have now warned that the welfare U-turn, on top of reversing the cut to winter fuel, means that tax rises in the autumn are more likely – with Ms Reeves now needing to find £5bn to make up for the policy U-turns.
Asked by Ms Badenoch whether he could rule out further tax rises – something Labour promised it would not do on working people in its manifesto – Sir Keir said: “She knows that no prime minister or chancellor ever stands at the despatch box and writes budgets in the future.
“But she talks about growth, for 14 years we had stagnation, and that is what caused the problem.”
Prosecutors are considering whether to bring further criminal charges against Lucy Letby over the deaths of babies at two hospitals where she worked
The Crown Prosecution Service said it had received “a full file of evidence from Cheshire Constabulary asking us to consider further allegations in relation to deaths and non-fatal collapses of babies at the Countess of Chester Hospital and Liverpool Women’s Hospital”.
“We will now carefully consider the evidence to determine whether any further criminal charges should be brought,” it added.
“As always, we will make that decision independently, based on the evidence and in line with our legal test.”
Letby, 35, was found guilty of murdering seven children and attempting to murder seven more between June 2015 and June 2016 while working in the neonatal unit of the Countess of Chester Hospital and is currently serving 15 whole-life orders.
Image: Letby worked at the Countess of Chester Hospital and Liverpool Women’s Hospital
She is understood to have carried out two work placements at Liverpool Women’s Hospital, where she trained as a student, between October and December 2012, and January and February 2015.
Police said in December that Letby was interviewed in prison as part of an investigation into more baby deaths and non-fatal collapses.
A Cheshire Constabulary spokesperson said: “We can confirm that Cheshire Constabulary has submitted a full file of evidence to the CPS for charging advice regarding the ongoing investigation into deaths and non-fatal collapses of babies at the neo-natal units of both the Countess of Chester Hospital and the Liverpool Women’s Hospital as part of Operation Hummingbird.”
Detectives previously said the investigation was looking into the full period of time that Letby worked as a nurse, covering the period from 2012 to 2016 and including a review of 4,000 admissions of babies.
Letby’s lawyer Mark McDonald said: “The evidence of the innocence of Lucy Letby is overwhelming,” adding: “We will cross every bridge when we get to it but if Lucy is charged I know we have a whole army of internationally renowned medical experts who will totally undermine the prosecution’s unfounded allegations.”
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2:09
Three managers at the hospital where Lucy Letby worked have been arrested on suspicion of gross negligence manslaughter.
Earlier this year, Letby’s lawyers called for the suspension of the inquiry, claiming there was “overwhelming and compelling evidence” that her convictions were unsafe.
Their evidence has been passed to the Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice, and Letby’s legal team hopes her case will be referred back to the Court of Appeal.