UK economy narrowly avoids recession despite December hit from strikes
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.
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.
“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.
“Across 2022 as a whole, the economy grew 4%.
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“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.”
Two pro-Palestinian demonstrators have thrown red powder on Tower Bridge – just moments before leading runners in the London Marathon went past.
The protesters were arrested on suspicion of causing a public nuisance and remain in custody, said the Metropolitan Police.
A video shared by Youth Demand, which is calling for a trade embargo on Israel, shows two people jumping over a barrier that separates spectators from the race course.
The pair, wearing t-shirts that say “Youth Demand: Stop Arming Israel”, are then seen standing in the middle of the road on the bridge.
Pic: LNP
They throw red powder in the air as an official marathon car goes past displaying the race time.
A motorbike with a cameraman on board continues along the route, while a second motorbike stops and one of the riders gets off and pushes the pair out of the way, just before the men’s elite runners pass.
Several police officers then jump over the barrier and detain the pair, the footage shows.
There appeared to be no impact on the marathon.
More than 56,000 participants were expected to take part in the 26.2-mile race through the capital.
Sabastian Sawe of Kenya won the men’s elite race in a time of two hours, two minutes and 27 seconds, while Ethiopia’s Tigst Assefa shattered the women’s-only world record in two hours, 15 minutes and 50 seconds.
Assefa beat the previous best of two hours, 16 minutes and 16 seconds set last year in London by Kenyan Peres Jepchirchir.
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Pic: LNP
The Metropolitan Police said in a statement: “At around 10.38am, two protesters from Youth Demand jumped over barriers at Tower Bridge and threw red paint on to the road.
“Marathon event staff intervened to remove the protesters from the path of the men’s elite race which was able to pass unobstructed.”
The force added that they were “quickly supported by police officers who arrested the protesters on suspicion of causing a public nuisance”.
The Met said the paint “appeared to be chalk-based” and was not expected to “present a hazard to runners yet to pass this point”.
Counter-terrorism police are investigating after an incident involving a crossbow and a firearm left two women injured in Leeds.
Police were called to Otley Road at 2.47pm on Saturday to reports of a “serious incident involving a man seen with weapons”, West Yorkshire Police said.
Officers arrived at the scene to find two women injured – and a 38-year-old man with a self-inflicted injury. All three were taken to hospital, with the man held under arrest, but their injuries are not believed to be life-threatening.
“Two weapons have been recovered from the scene, which were a crossbow and a firearm,” Counter Terrorism Policing North East said in a statement.
The incident happened on the ‘Otley Run’ pub crawl, with one venue saying it was closed for the evening due to “unforeseen circumstances”.
Officers guard one of the crime scenes
Officers inside the cordon in Leeds
Counter Terrorism Policing’s statement added: “Due to the circumstances surrounding the incident, Counter Terrorism Policing North East have taken responsibility for leading the investigation with the support of West Yorkshire Police.
“Extensive enquiries continue to establish the full circumstances and explore any potential motivation.”
Home Secretary Yvette Cooper described it as a “serious violent incident” and said she was being kept updated by police.
“Thank you to the police and emergency services for their swift response,” she said. “My thoughts are with the victims and all those affected by this attack.”
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