London: Britain is suffering its longest hit to living standards on record, new figures show, in a major blow to already dim hopes of a return for Rishi Sunak's Conservative government in this year's general election.
The UK entered a technical recession at the end of last year, with the economy shrinking by 0.3 per cent in the three months to December after previously shrinking by 0.1 per cent in the September quarter, official figures released on Thursday showed.
British Prime Minister Rishi Sunak speaks with business leaders.credit: AP
Two consecutive quarters of contraction in GDP – a measure of the amount of goods and services produced – is usually defined as a technical recession, although many economists believe a recession is a better description in the absence of a more severe or more sustained contraction.
GDP per capita, which measures economic growth adjusted for population size, fell 0.7 percent last year, marking the longest period of declining or stagnant living standards since records began in 1955.
The result represents a blow to Sunak as he prepares to contest a general election this year. Economic growth is one of his government's five key pledges alongside cutting immigration and reducing the hospital waiting list – now at 7.8 million, a record.
The Conservative Party has dominated British politics for most of the past seven decades, with a reputation for economic efficiency. But Labor is now more confident in the economy, according to opinion polls.
A man walks past empty tables in a restaurant in London. The UK has not yet recovered from the pandemic.credit: AP
Sunak is also now likely to scale back his plans for more tax breaks in the Budget due in three weeks.
The Prime Minister told chief executives gathered in Downing Street that although it was clear that “global headwinds” were affecting companies, referring to unrest in the Red Sea, where violence by Houthi rebels has led to companies rerouting shipments, He believes things are looking up.
