London Daily

Focus on the big picture.
Wednesday, Mar 18, 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
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Holds Back on Hormuz Escort Mission While Continuing Talks with Allies
TrumpRx Pricing Platform Faces Scrutiny as Some Medicines Remain Costlier Than in the UK
UK, Netherlands and Finland Explore Joint Defence Investment Bank to Boost Military Capability
Deadly Meningitis Outbreak in Kent Raises Alarm as Cases Surge and Emergency Response Expands
UK Security Adviser Viewed US-Iran Nuclear Deal as Within Reach Before Sudden Escalation
UK Prime Minister Urges Continued Focus on Ukraine Amid Escalating Iran Conflict
UK Introduces New Safeguards to Shield Lenders from Bank Run Risks
UK Promotional Products Market Surpasses £1.3 Billion as Demand Strengthens in 2025
Reeves Pushes for Deeper UK-EU Economic Ties to Revive Growth
UK Security Adviser Saw No Imminent Iranian Nuclear Threat Days Before War Erupted
France Signals Warm Welcome for UK Return to EU Single Market Amid Renewed Cooperation Talks
UK Defence Official Criticises Boeing Over Delays to E-7 Wedgetail Programme
UK Urged to Secure Quantum Talent as Minister Warns Against Repeating AI Setbacks
UK Mayors Set to Gain New Spending Powers Under Reeves’ Fiscal Devolution Plan
Western Allies Urge Restraint as Israel Weighs Expanded Ground Operation in Lebanon
Trump Warns NATO Faces ‘Very Bad’ Future Without Stronger Allied Support in Iran Conflict
UK Minister Says Britain Not Bound to Support Every Demand From U.S. President
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
UK Set to Introduce Steel Tariffs of Up to 50 Percent in New Industrial Strategy
European Governments Decline Trump’s Call to Send Warships to Reopen Strait of Hormuz
Fears Over Iran Conflict Weigh on UK Consumer Confidence
Starmer Says UK Working With Allies on Hormuz Shipping Plan After Trump Raises Pressure
Iran War and Energy Shock Shake Britain’s Economy and Political Debate
Deadly Meningitis Outbreak at UK University Leaves Two Dead and Several Seriously Ill
Deadly Meningitis Outbreak at UK University Leaves Two Dead and Several Seriously Ill
King Charles and Queen Camilla Share Personal Tributes to Their Mothers on UK Mother’s Day
Prince William Honors Princess Diana with Mother’s Day Tribute
UK Economy Stalls in January as Households Cut Back on Eating Out
AI-Generated Singer Becomes Viral Voice for Iranians With New Anthem
London Private Club Founder Plans Exclusive Palm Beach Venue Near Trump’s Mar-a-Lago
Ed Davey Urges Britain to Build Fully Independent Nuclear Missile Capability
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
US Treasury Links British Polo Patrons to Alleged Venezuelan Oil Proceeds Laundering Scheme
Hundreds Gather in London Despite Ban on Annual Pro-Palestinian March
Two Dead and Multiple Students Seriously Ill After Invasive Meningitis Outbreak at UK University
UK Considers Deploying Ships and Mine-Hunting Drones to Reopen Strait of Hormuz
Starmer and Trump Discuss Urgent Need to Reopen Strait of Hormuz Amid Escalating Iran Conflict
Prince Harry and Meghan Markle’s Planned Australia Visit Draws Mixed Reaction From Local Communities
Trump Calls on France and UK to Help Safeguard Strait of Hormuz Shipping Route
Boris Johnson Labels Bitcoin a ‘Ponzi Scheme’, Sparking Debate in Crypto World
UK Considers Targeted Aid for Vulnerable Households as Energy Costs Rise
Stellantis Urges Immediate Review of UK Electric Vehicle Sales Targets
Home Office Reverses Course to Allow Some Dual Nationals to Enter UK Using EU Passports
Reform UK Proposes Replacing Top Civil Servants With Officials Aligned to Government Agenda
×