UK economy avoids recession as GDP unexpectedly inches up 0.1% – what it means for your money
THE UK economy grew 0.1% in the final quarter of 2022, the Office for National Statistics (ONS) has said.
It previously said that gross domestic product (GDP) for the period was flat at 0.0%.
GDP is a measure of the size of an economy. If it’s rising then the economy is growing, if it’s falling then it’s shrinking.
The revised figures mean the economy grew slightly between October and December last year, when previously it was thought to be neither growing or shrinking.
As a result, it means the UK has managed to avoid a recession.
A country is in recession when its economy shrinks over a sustained period of time, rather than growing normally.
It usually occurs when there are two consecutive quarters of negative growth.
Darren Morgan, director of economic statistics at the ONS said: “The economy performed a little more strongly in the latter half of last year than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought in the latest quarter.”
“Households saved more in the last quarter, with their finances boosted by the government’s energy bill support scheme.
“Meanwhile, the UK’s balance of payments deficit with the rest of the World narrowed, driven by increased foreign earnings by UK companies, particularly in the energy sector.”
The ONS also said that for the third quarter July to September 2022, the economy fell 0.1% instead of 0.2%.
In September last year, the ONS also revised its initial statement that there was a 0.1% fall in GDP between April and June.
It said that it actually grew 0.2% over the three months instead.
GDP is now estimated to have increased by 4.1% in 2022, revised up from the previous estimate of 4.0%.
What is a recession and what does it mean for your finances?
Recessions are worrying because they tend to lead to unemployment and wage stagnation.
This consequently means the government gets less tax, which could mean cuts to services and benefits, or that rates go up.
There are lots of different reasons why a country may head into recession.
The UK last went into recession in 2020 due to the coronavirus pandemic, and there was a more severe one in 2008/9 when the global financial crisis hit.
Going into recession can have a big impact on your finances and job losses are common as companies let people go to cut their costs and stay afloat.
Job losses are common, as companies try to cut their costs to stay afloat.
The number of people in debt and arrears is also likely to soar, and there could be more defaults on loans and mortgages or repossessions and bankruptcies.
There are some things you can do to shore up your finances if you’re worried about recession.
Tracking your monthly outgoings, making a note of the date that bills are paid and looking for areas to cutback is a good first step.
Use a benefits calculator to see if you’re entitled to any extra help. Millions of people qualify for cost-of-living payments of up to £1,700 – find out what you can get.
If you are behind on bills, speak to your providers.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk