Labour keen to make today's figures a political momentpublished at 11:43 Greenwich Mean Time 15 February 2024

11:43 GMT 15 February 2024

Helen Catt
Political correspondent

Choosing to call a news conference, rather than responding in an interview, is a statement in itself - and it's one shadow chancellor Rachel Reeves made today (see our last couple of posts).

It’s an opportunity for Labour to seize the initiative and shift the focus onto the Conservative's troubles after a difficult week.

It also gives Labour a chance to pin this on PM Rishi Sunak personally - and to draw a distinction with what Labour would do.

But it has also invited questions on exactly how Labour would approach this differently. Rachel Reeves's answer: stability, investment and reform.

The party is likely to come under pressure to explain those individual measures more fully.

Rachel Reeves, the shadow chancellor, has finished talking to reporters - but before then she took a few questions from reporters.

One of those questions focused on Labour's jibe that this is "Rishi Sunak's recession" - asking Reeves how she can ensure it doesn't become "Rachel's recession".

She says Sunak "has been prime minister since October 2022 ... and the economy is now smaller than when he came to office".

"This is his recession", Reeves goes on, adding that one of Sunak's five pledges was to grow the economy "but we now know he has failed to achieve this".

Following the news today that the UK had fallen into a recession at the end of last year, shadow chancellor Rachel Reeves called a news conference to lay out Labour's response.

It's going on at the moment - we've just been listening in to see if she says any more than the comments we brought you earlier.

As well as repeating that the announcement of a recession will be "deeply worrying news" for both families and businesses, Reeves says it's "absolutely clear" the country is "trapped in a spiral of economic decline" at the hands of the government.

She blames the Conservatives, saying they're "out of touch" and "content to be the managers of decline". And on the prime minister himself, she says he's "put the economy in reverse".

We in the newsroom are continuing to comb through the data released by the Office for National Statistics (ONS) this morning - and there's a lot more there than GDP.

Other numbers also show the current state of the economy - let's take a look at some of them now.

January saw a jump in direct debit failure rate - this is how often a direct debit for utilities, gyms, mortgages or loans can't be paid due to insufficient funds in a person's account.

• It rose from 0.80% to 1.07% - the highest since the data was first recorded at the start of 2019.

Meanwhile, the number of jobs being advertised online is currently 15% lower than last year.

• The data - for the week to 9 February - was 1% higher than the previous week, though.

Still, businesses remain optimistic. Some 22% are expecting turnover to increase in March - an 18% rise on the previous month

Jake Lapham
Live reporter

Image source, Reuters

As we reported earlier, the UK isn't alone in hitting some economic turbulence, with Germany also enduring a rough ride.

But if we dig a little deeper into the data from London and Berlin, a pretty interesting (and slightly strange) picture emerges.

This morning, we learnt the UK economy entered a recession at the end of last year. However, the economy did actually grow by 0.1% in 2023 as whole.

By contrast, Germany's economy shrank by 0.3% last year, the worst recorded performance of all major global economies.

Interestingly, Germany avoided a recession. How, you may ask? Because there were no two consecutive quarters of negative growth. The economy grew at the beginning of the year, stagnated in the middle, then went downhill in the last quarter.

What this tells us is that while the term "recession" indicates some vital signs, it doesn't give a complete picture of the health of an economy.

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As we've been reporting, it's believed the recession at the end of last year may be short-lived.

Some market stall owners in Shrewsbury, in the West Midlands, have even told the BBC they're experiencing good footfall and business at the start of the 2024.

John Painter, who runs fruit and vegetable stall JP Fruits at Market Hall in Shrewsbury, says he can remember the market from the 1970s onwards.

"Whenever there's been a recession, the market's been good - people come here for good value," he tells BBC Breakfast, adding that recent improvements to Market Hall have meant "trade's been wonderfully good".

Angela and Tom (in the clip below) say similar - Tom in particular reports having a "slight slow down" during Christmas but says it's "definitely increasing now".

Postpublished at 09:38 Greenwich Mean Time 15 February 2024

09:38 GMT 15 February 2024

Image source, .

Even a mild recession, as this one's being described, will still hit living standards.

The total amount of money in the economy isn’t as important as the total amount per person.

That tells you whether we're getting richer, or just bigger - and the news there is worse.

The total size of the economy only started shrinking in the second half of last year.

But with very little growth over the last two years, and a population that keeps growing, GDP per person has been shrinking for two years.

In the last three months of the year, the UK economy produced about £8,250 worth of stuff per person, down from a peak of over £8,390 at the start of 2022.

Image source, Getty Images

As you probably know by now, the UK fell into recession at the end of 2023, following a successive quarterly decline in Gross Domestic Product (GDP) in the last three months of the year.

But how does that affect regular people? Well, the government can use growing GPD as evidence that it's doing a good job of managing the economy. Likewise, if GDP falls, opposition politicians tend to say the government's running it badly.

If GDP is going up steadily, people pay more in tax because they're earning and spending more. This means there's more money for the government that it can choose to spend on public services, such as schools, the police and hospitals.

GDP can be measured in three ways:

• Output: The total value of the goods and services produced by all sectors of the economy (agriculture, manufacturing, energy, etc)

• Expenditure: The value of goods and services bought by households and by government, investment in machinery and buildings - this also includes the value of exports, minus imports

• Income: The value of the income generated, mostly in terms of profits and wages

Faisal Islam
Economics editor

I've just sat down with Chancellor Jeremy Hunt, who tells me the UK economy is "resilient" after figures showed this morning that it had entered a recession in the last three months of 2023.

Hunt admits today's data was “challenging” - but that tackling inflation "had to come first".

The turning point for the economy "will come when inflation falls to its target of 2% and the Bank of England feels it can bring down interest rates," he says, adding:

Inflation has fallen from a high of 11.1%, in October 2022, to 4% - so it's still twice the Bank's target of 2%.

At the beginning of 2023, PM Rishi Sunak pledged to grow the economy. Now, the chancellor says that when the commitment was made, Sunak was "very clear, tackling inflation had to come first".

"The big picture is that, actually, since then the economy has been more resilient, unemployment has stayed low, real wages have been rising now for six months," he tells me. "And if we stick to our guns now, we can see light at the end of the tunnel."

Helen Catt
Political correspondent

Chancellor Jeremy Hunt is seeking to play down the UK's fall into recession at the end of 2023 - but it's his boss on whom the opposition are keen to pin the blame.

Both Labour and the Liberal Democrats have dubbed this "Rishi Sunak's recession"- and not just for the alliteration.

They will want to remind people that Sunak's last job was being directly in charge of the nation's finances, when he himself was chancellor.

It's also another reminder that one of his five personal pledges as prime minister was to grow the economy.

Let's hear now from Liz McKeown, director of economic statistics at the Office for National Statistics (ONS), which published today's figures.

Speaking to our colleagues on Radio 4's Today programme, she says that while the UK fell into recession in December, many experts believe the "broader picture" of the economy should be considered.

Despite a fall in GDP at the end of the year, the overall picture is that 2023 was "basically flat", McKeown explains, and that in other countries this would not necessarily be classed as a recession.

Asked what's behind these latest figures, she says a number of things have played a part - from "weak retail sales in December", through to strikes in the healthcare sector, and lower school attendances.

Image source, Getty Images

If you're just joining us, or need a recap, the main thing to know is that the UK fell into recession at the end of last year - but it was mild and forecasters believe it'll be short-lived.

• The Office for National Statistics announced, external that Gross Domestic Product (GDP) fell by 0.3% in the last three months of 2023 - and because this was the second quarter in a row where GDP fell, the UK entered a recession
• But it was the mildest start to a recession since the 1970s, with the last five in the UK seeing the economy shrink by more than 1% - in 2023 it shrunk by 0.5%
• The ONS figures show that all major sectors - services (by 0.2%), production (1%) and construction (1.3%) - contracted but it's thought the dip may not last long because the UK jobs market remains strong and wage growth is outpacing inflation
• Overall, there was also some growth last year - albeit weak - with GDP growing overall by 0.1%, in comparison with the year before
• Chancellor Jeremy Hunt insists the economy is "turning a corner" but admits low growth is "not a surprise" at the moment - while shadow chancellor Rachel Reeves says PM Rishi Sunak's promise to grow the economy is in "tatters"

• The UK is not alone, though - the EU narrowly avoided recession in the second half of 2023 and Japan slipped into one just last night

As well as the latest GDP figures, today's update from the Office for National Statistics (ONS) confirmed how the UK economy grew across the whole of 2023.

GDP is estimated to have grown by 0.1% last year, in comparison with the year before.

Not taking 2020 into account because of the Covid pandemic, it's the weakest figure seen since the financial crisis in 2009.

And - as a reminder - those two successive quarters of GDP falling in the second half of 2023 meant the UK entered a recession. So even though there was some growth across the year, the economy still shrank in the second half.

Here's a breakdown of how the last few years have looked:

The R-word hangs over the economy until May - at leastpublished at 07:58 Greenwich Mean Time 15 February 2024

07:58 GMT 15 February 2024

Faisal Islam
Economics editor

Image source, Getty Images

This morning's GDP figure is worse than expected, with a clear contraction in the economy at the end of last year driven by a tough few months for retailers and consumers.

It's based on the most widely-used definition of a recession, albeit still a modest one, assuming forecasts of growth in the current quarter (January-March) are correct.

But it's difficult to square these figures with the prime minister's pledge to get the economy growing.

On other more comprehensive measures of recession, for example that used by the United States, this would not count as a recession.

That will be of little comfort to Downing Street, though. The economy officially fell a little, and on one of the main GDP measures it hasn’t grown since the first three months of 2022.

Few forecasters believe this will change much over the next few months, although rising real incomes - which take rising prices into account - should see growth exceed zero. The "R-word" (recession) now officially hangs over the economy until May, barring revisions.

There's more political reaction now, this time from shadow chancellor Rachel Reeves, who says today's announcement of a recession suggests that the prime minister's "promise to grow the economy is now in tatters".

She goes on:

We'll continue to bring you reaction to the latest growth figures as the morning goes on.

A rocky time - but the UK's not alonepublished at 07:41 Greenwich Mean Time 15 February 2024

07:41 GMT 15 February 2024

Dharshini David
Chief economics correspondent

Image source, Getty Images

It's fair to say 2023 was a rocky time, but the UK's not alone.

The EU narrowly avoided recession in the second half of the year - and Germany, its largest member, saw its output shrink by 0.3% in the final quarter, like the UK.

Meanwhile, Japan overnight confirmed that it unexpectedly slipped into a recession.

The cost of living crisis has taken a heavy toll around the world, and the side effects of the higher interest rates deployed to tackle that have also hit spending, incomes and profits.

And some countries have experienced additional factors - Germany has had to wean itself off Russian energy, and seen demand for the export relies so heavily on cooling.

Here in the UK, Brexit appears to have had an impact both on investment and the availability of skilled workers.

But the encouraging news here, is that even as last year's GDP figures come out, our economy may have turned the corner in early 2024.

The jobs market remains resilient, and wage growth is outpacing inflation.

Image source, Reuters

We're starting to get some reaction to the GDP figures now - and up first we've got Chancellor Jeremy Hunt.

He says:

The UK's latest inflation figures - published yesterday - showed that the rate had remained at 4%. While there was no increase, Hunt acknowledged this was still double the 2% target set by the government and Bank of England.

As our colleagues at BBC Verify just explained, this is a relatively mild recession.

Christopher Breen, an economist for the Centre for Economics and Business, says it may not extend beyond two quarters.

"We do think that this could be the end of the recession," Breen tells BBC Breakfast. "This is a very shallow recession if you look at the previous recessions we've had."

Breen adds: "Everyone knows the reason why this happened, with the cost of living crisis.

"For a lot of last year people's wages haven't been keeping up - however that has changed and wages are now rising faster than prices."

Mildest start to a recession in 50 yearspublished at 07:19 Greenwich Mean Time 15 February 2024

07:19 GMT 15 February 2024

The economy has shrunk by a total of 0.5% over the last two quarters of 2023, triggering a technical recession.

It’s the mildest start to a recession since at least the 1970s.

The last five recessions in the UK have all seen the economy shrink by more than 1% in their first two quarters (see figures below).

The closest to this year’s figure is in fact the double-dip recession-that-wasn’t of early 2012.

The first published estimates suggested that the economy had shrunk by 0.5% in late 2011 and early 2012. But when more data came in, it turned out that the economy had actually grown by 1% in that period.

Here's a look at the previous recessions we mentioned:

• 1973: -1.3%,
• 1980: -3%,
• 1990: -1.6%
• 2008: -2%
• 2012: initial estimate: -0.5%, revised to +1.0%
• 2020: -22.5%