London Daily

Focus on the big picture.
Tuesday, Jul 21, 2026

UK economy avoids recession but not out of woods - Hunt

UK economy avoids recession but not out of woods - Hunt

The UK narrowly avoided falling into recession in 2022, new figures show, after the economy saw zero growth between October and December.

This is despite a sharp 0.5% fall in economic output during December, partly due to strike action, the Office for National Statistics (ONS) said.

Chancellor Jeremy Hunt said the figures showed "underlying resilience" but said "we are not out of the woods".

The Bank of England still expects the UK to enter recession this year.

But it thinks it will be shorter and less severe than previously forecast.

The Bank of England is the UK's central bank. The BBC included its view as it has a central role in managing the overall state of the economy.

One of the ways it does that is by changing interest rates. Recently, it has been raising rates in a bid to tackle the soaring cost of living.

Mr Hunt, who the BBC spoke to for the government's position, said that high inflation remains a problem and continues to cause "pain for families up and down the country".

Inflation - or the rate at which prices are rising - is slowing but at 10.5% remains close to a 40-year high.

The ONS, which published the economic output figures, said there was no growth in the final three months of 2022.

This is the first estimate for the period and figures are often revised later on.

On Friday, the ONS revised up its figures for the July to September quarter, to show that the economy shrank by 0.2% instead of the previous estimate of a 0.3% fall.


A recession is typically defined as when the economy shrinks for two consecutive three-month periods. This usually means it is performing badly and companies may make less money and cut jobs, leaving the government with less tax revenue.

The figures for December, however, were worse than expected, and there will be no celebrations at the Treasury.

Darren Morgan from the ONS said there was a fall in health services with fewer operations and GP visits, while school attendance also dropped in the week before schools broke up for Christmas.

He explained that in terms of public services, the ONS measures things like teachers' wages, and how much investment is made in schools and the health services. "The services they provide are a really important part of the economy so we include it in our measurement," he said.

He also said that sporting activities, particularly football, were impacted because of the World Cup.

He said people were not "able to enjoy top-flight football due to the absence of Premier League football until Boxing Day, as the World Cup continued".

Mr Morgan added that rail and postal industries "had a poor month". "We certainly saw the impact of strikes as both fell heavily in December."

Strike action on trains caused disruption on the railways and on the roads in December. Postal workers also went on strike on a series of days in the run-up to Christmas.

The year-on-year comparison is not the same as adding up the quarterly growth figures.

It is a comparison of the full year with the full previous 12 months, which in 2021 included the lockdown at the beginning. When compared against that low base, the UK's economy was 4% bigger in 2022 than in 2021.

That was the biggest increase of all G7 nations for last year.

But the UK is also still the only G7 country where the economy is smaller than pre-pandemic levels.


Labour and the Liberal Democrats, who we've included to explain opposing parties' point of view, warned the latest figures make for grim reading.

Rachel Reeves, Labour's shadow chancellor, said they show the economy "is stuck in the slow lane".

She added: "We must bring in urgent measures to prevent yet more harm from the cost of living crisis, using a proper windfall tax on oil and gas giants to stop the energy price cap going up in April so that people have more money in their pockets."

Liberal Democrat MP Sarah Olney said: "Britain is dangling on over the edge of a recession after months of economic vandalism and chaos in government.

"The blame for these gloomy figures lies squarely with the government, who have botched budgets, failed to tackle inflation and have no plan for growth."


Jeremy Hunt: "We're not out of the woods yet"


Newsletter

Related Articles

0:00
0:00
Close
EU Imposes Record €550 Million Digital Services Fine on AliExpress
UK Publishes Updated Consumption-Based Carbon Emissions Data
English Regions Prepare for Expanded Devolution and Infrastructure Powers
Russell Group Backs New Government and Calls for Stronger University-Industry Links
Bank of England Maintains Restrictive Monetary Policy Amid Persistent Inflation
Climate Progress Report Renews Debate Over the UK's Net Zero Strategy
New UK Government Launches Drive to End Rough Sleeping and Expand Social Housing
Prime Minister Andy Burnham Appoints John Healey as Chancellor in Cabinet Reshuffle
OECD Calls for Structural Reforms as UK Economy Faces Slower Growth
International Monetary Fund Expects UK Economic Growth to Slow to One Percent in 2026
Andy Burnham Takes Office as UK Prime Minister and Unveils Decade-Long Reform Agenda
London’s Housing Starts Collapse as Planning and Building Costs Stall Development
Charlie Sheen’s Daughter: "My Dad Didn’t Buy Me a House, My Breasts Bought It"
Vivienne Westwood Casts Cicciolina, 74, in Its New Autumn Campaign
Dejavu: Germany’s Military Expansion Reshapes Europe’s Strategic Balance With France
Naturally Conceived Identical Quadruplets Born in Rare Brisbane Delivery
Tate Brothers Fight British Extradition Bid After Miami Arrests
Burnham Reshapes Britain’s Government Around Living Costs, Devolution and Security
Jingye Demands Full Compensation After Britain illegally Nationalized British Steel
Just Another Liar or a Robin Hood? Andy Burnham Pledges Cost-of-Living Help in First Speech as UK Prime Minister
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Trump Draws Boos and Podium Scrutiny at Spain’s World Cup Triumph
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Police Block Cockroach Janta Party’s March to Parliament as Education Protests Intensify
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Turkey Explores S-400 Transfer to UAE in Bid to Rejoin F-35 Program
Josh Kerr Breaks Twenty-Seven-Year World Mile Record at London Diamond League
Thames Water Crisis Deepens as South East Water Outages Hit Thousands in Kent
EU Ban on Destroying Unsold Clothing Forces British Fashion Brands to Change Operations
UK Government Confirms Existing North Sea Oil and Gas Licences Will Be Honoured
UK Covid Inquiry Finds Nearly Ten Billion Pounds Lost in Pandemic Protective Equipment Procurement
Thames Water Moves Toward Possible Temporary Nationalisation Amid Rescue Plan Dispute
Andy Burnham Cancels One Point Eight Billion Pound Digital ID Programme After Taking Office
UK Government Takes British Steel Into Full Public Ownership to Protect Jobs and Supply Chains
Andy Burnham Becomes UK Prime Minister and Pledges Focus on Living Costs and Public Services
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Singapore Considers Lower Taxes for Fund Managers as Hong Kong Intensifies Talent Contest
US Retaliates Against Iran After Two American Troops Killed in Jordan
Bank of Asia BVI Enters Court-Supervised Liquidation After Regulators Find It Insolvent
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Iran Claims It Destroyed Bahrain’s Main Artificial Intelligence Center in Missile and Drone Strike
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Brothers Andrew and Tristan Tate Who Turned "Toxic Masculinity" Into a Brand Arrested in Miami as Britain Seeks Their Extradition
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
×