London Daily

Focus on the big picture.
Friday, Jan 16, 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
The graduate 'jobpocalypse': Entry-level jobs are not shrinking. They are disappearing.
Cybercrime, Inc.: When Crime Becomes an Economy. How the World Accidentally Built a Twenty-Trillion-Dollar Criminal Economy
The Return of the Hands: Why the AI Age Is Rewriting the Meaning of “Real Work”
UK PM Kier Scammer Ridicules Tories With "Kamasutra"
Strategic Restraint, Credible Force, and the Discipline of Power
United Kingdom and Norway Endorse NATO’s ‘Arctic Sentry’ Mission Including Greenland
Woman Claiming to Be Freddie Mercury’s Secret Daughter Dies at Forty-Eight After Rare Cancer Battle
UK Launches First-Ever ‘Town of Culture’ Competition to Celebrate Local Stories and Boost Communities
Planned Sale of Shell and Exxon’s UK Gas Assets to Viaro Energy Collapses Amid Regulatory and Market Hurdles
UK Intensifies Arctic Security Engagement as Trump’s Greenland Rhetoric Fuels Allied Concern
Meghan Markle Could Return to the UK for the First Time in Nearly Four Years If Security Is Secured
Meghan Markle Likely to Return to UK Only if Harry Secures Official Security Cover
UAE Restricts Funding for Emiratis to Study in UK Amid Fears Over Muslim Brotherhood Influence
EU Seeks ‘Farage Clause’ in Brexit Reset Talks to Safeguard Long-Term Agreement Stability
Starmer’s Push to Rally Support for Action Against Elon Musk’s X Faces Setback as Canada Shuns Ban
UK Free School Meals Expansion Faces Political and Budgetary Delays
EU Seeks ‘Farage Clause’ in Brexit Reset Talks With Britain
Germany Hit by Major Airport Strikes Disrupting European Travel
Prince Harry Seeks King Charles’ Support to Open Invictus Games on UK Return
Washington Holds Back as Britain and France Signal Willingness to Deploy Troops in Postwar Ukraine
Elon Musk Accuses UK Government of Suppressing Free Speech as X Faces Potential Ban Over AI-Generated Content
Russia Deploys Hypersonic Missile in Strike on Ukraine
OpenAI and SoftBank Commit One Billion Dollars to Energy and Data Centre Supplier
UK Prime Minister Starmer Reaffirms Support for Danish Sovereignty Over Greenland Amid U.S. Pressure
UK Support Bolsters U.S. Seizure of Russian-Flagged Tanker Marinera in Atlantic Strike on Sanctions Evasion
The Claim That Maduro’s Capture and Trial Violate International Law Is Either Legally Illiterate—or Deliberately Deceptive
UK Data Watchdog Probes Elon Musk’s X Over AI-Generated Grok Images Amid Surge in Non-Consensual Outputs
Prince Harry to Return to UK for Court Hearing Without Plans to Meet King Charles III
UK Confirms Support for US Seizure of Russian-Flagged Oil Tanker in North Atlantic
Béla Tarr, Visionary Hungarian Filmmaker, Dies at Seventy After Long Illness
UK and France Pledge Military Hubs Across Ukraine in Post-Ceasefire Security Plan
Prince Harry Poised to Regain UK Security Cover, Clearing Way for Family Visits
UK Junk Food Advertising Ban Faces Major Loophole Allowing Brand-Only Promotions
Maduro’s Arrest Without The Hague Tests International Law—and Trump’s Willingness to Break It
German Intelligence Secretly Intercepted Obama’s Air Force One Communications
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
Fake Mainstream Media Double Standard: Elon Musk Versus Mamdani
HSBC Leads 2026 Mortgage Rate Cuts as UK Lending Costs Ease
US Joint Chiefs Chairman Outlines How Operation Absolute Resolve Was Carried Out in Venezuela
Starmer Welcomes End of Maduro Era While Stressing International Law and UK Non-Involvement
Korean Beauty Turns Viral Skincare Into a Global Export Engine
UK Confirms Non-Involvement in U.S. Military Action Against Venezuela
UK Terror Watchdog Calls for Australian-Style Social Media Ban to Protect Teenagers
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Europe’s Luxury Sanctions Punish Russian Consumers While a Sanctions-Circumvention Industry Thrives
Berkshire’s Buffett-to-Abel Transition Tests Whether a One-Man Trust Model Can Survive as a System
Fraud in European Central Bank: Lagarde’s Hidden Pay Premium Exposes a Transparency Crisis at the European Central Bank
Trump Announces U.S. Large-Scale Strike on Venezuela, Declares President Maduro and Wife Captured
Tesla Loses EV Crown to China’s BYD After Annual Deliveries Decline in 2025
×