NIESR Economist Paula Bejarano Carbo has described Thursday’s GDP reading, which showed the UK fell into a technical recession late last year, as “arbitrary”.
ONS data revealed that GDP fell by 0.3% in the final quarter of last year, following a 0.1% decline in the previous three months.
“By the standard metric, this means that the UK economy was in a shallow recession in the second half of last year,” Carbo acknowledged.
“However, this metric is both arbitrary and not greatly informative,” she said.
“The state of the UK economy is better described by the fact that GDP fell between the first quarter of 2022 and the final quarter of 2023.
“Further, GDP per head remains lower than pre-Covid. The broader picture of flatlining growth and its adverse implications for living standards in the long-term should dominate today’s headlines, rather than technicalities.”
Finalto's Neil Wilson echoed the sentiment, again arguing that wide reports of the UK now officially being in a "technical recession" were missing the point.
"Recession, recession everywhere, ne’er any drop to think," he said.
"Who cares whether the national GDP is up or down when GDP per capita is terminal – down 0.7% in 2023.
"Too few people are shouldering too much of the burden and we keep adding to the burden. The loss of per capita income is all that matters."