In 2023 Q4 the UK economy contracted by 0.3% quarter-on-quarter, according to official figures. As this was the second consecutive quarterly contraction, the economy can be said to have entered a technical recession in the second half of last year, according to one definition. More alarming however is when the same figures are reviewed on a per capita basis – i.e. real GDP growth after stripping out increases in population, a metric that is often used as a proxy for living standards. On this measure, growth has been negative for seven consecutive quarters, the longest run of negative returns since records began in 1955; and the contraction on this basis has increased in each of the last four quarters. Some other G7 nations, such as Germany and Japan, are performing poorly too, but with a general election due to be called later this year, Rishi Sunak, the UK prime minister, will be hoping for a turnaround in the coming quarters.
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