Preliminary data published by the Office for National Statistics (ONS) showed that UK GDP fell by 0.3% in the last three months of 2023 after falling by 0.1% in the third quarter. Thus, the economy entered recession. Economists had expected the economy to contract by 0.1%. Services output fell by 0.2% in the three months to December 2023. The largest negative contributors in this period were: a fall of 0.6% in the wholesale and retail trade; repair of motor vehicles and motorcycles subsector, a fall of 0.8% in education and a fall of 2.4% in other service activities. Consumer-facing services fell by 0.7% compared with the three months to September 2023. The largest contribution to the fall over this period were falls of 2.1% in food and beverage service activities, 0.9% in retail trade, except of motor vehicles and motorcycles, and 3.4% in the other personal service activities industry. Meanwhile, production output fell by 1.0% in the three months to December 2023. This was driven by a 0.9% fall in manufacturing, with 10 out of 13 manufacturing subsectors declining over this period. Construction output also declined (-1.3%) in the three months to December 2023. New work decreased by 5.0% over the period, while repair and maintenance rose by 4.0%. Within new work, the largest contributor to the decrease came from private new housing, which decreased by 8.0%.
In annual terms, GDP fell by 0.2%, offsetting growth in the third quarter (+0.2%). Consensus estimates suggested an increase of 0.1%.
Meanwhile, monthly estimates show that GDP fell by 0.1% in December, following growth of 0.2% in November (revised from +0.3%). Economists had expected GDP to fall by 0.2%. Output in services fell by 0.1% in December and was the largest contributing sector to the fall in monthly GDP. Production output grew by 0.6% on the month, while construction fell by 0.5%.