In Q4 of 2023, the UK's GDP fell by 0.3%, exceeding the predicted 0.1% decline. This follows a 0.1% drop in Q3, marking a technical recession.
The decline was attributed mainly attributed to the services sector (0.2%), manufacturing (1%), and the construction sector (1.3%). However, compared to 2022, there was a slight overall growth of 0.1%.
Accounting revenues in the services sector dropped by 12.4% in December to £3.47 billion, compared to the same period in 2022 when the decline was 8.2% to £3.52bn. Over the past 12 months, the accounting sector's revenue fell by 1.6%.
Despite a 0.1% growth in Q3, construction's new work dropped by 5%, offsetting the previous development. However, the sector is estimated to have grown by 2% over the year.
Other notable changes include a decline in vehicle sales and repair, while real estate recovered after a challenging November. In manufacturing, the 0.1% growth in Q3 reversed in Q4, with 10 out of 13 sub-sectors declining. Machinery manufacturing suffered the most, with a 7% drop, and the production of rubber and plastic products decreased by 4.7%.
Danni Hewson, head of financial analysis at AJ Bell, said:
"The fact that the UK slipped into recession at the end of 2023 isn't a surprise considering the cost-of-living crisis that hobbled us all over the year, but the size of the slump is slightly larger than had been expected."
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