Britain avoids recession – for now

Britain has avoided recession – for now. This morning’s update from the Office for National Statistics (ONS) reveals that there was no overall GDP growth between October and December last year. The UK has swerved the technical definition of recession – two consecutive quarters of negative growth – in the least glamorous way possible. It is not a story of growth, but a story of stagnation, that has kept the dreaded label of ‘recession’ at bay.

The government will be relieved by the figures this morning: the fiscal tightening that Rishi Sunak and Jeremy Hunt felt they had to do last year to calm market jitters and get the public finances back in order always risked taking steam out of the economy and stifling growth. That risk still exists. But this morning the Chancellor is already noting that the economy ‘is more resilient than many feared’. Instead of having to describe the economy as one in recession last year, he can instead note that it was ‘the fastest growing economy in the G7′.

But no one should get too comfortable.