Two consecutive quarters of contracting gross domestic product – the measure of the quantity of goods and services produced – is commonly defined as a technical recession,though many economists believe stagnation is a better description absent a sharper or more sustained downturn.
GDP per head,which measures economic growth adjusted for population size,also slid by 0.7 per cent last year,marking the longest period of falling or stagnating living standards since records began in 1955.
The result is a blow to Sunak as he prepares to fight a general election this year. Economic growth is one of his government’s five flagship pledges alongside cutting immigration and cutting the hospital waiting list – now at 7.8 million,a record high.
The Conservative Party has dominated British politics for much of the past seven decades,with a reputation for economic competence. But Labour is now more trusted with the economy,according to opinion polls.
Sunak is also now likely to scale down plans for more tax giveaways in the budget due in three weeks.
The prime minister told chief executives gathered in Downing Street that while it was clear “global headwinds” were affecting businesses,referencing disruption in the Red Sea,where violence by Houthi rebels have caused firms to redirect shipments,he believed things were on the up.