UK hunts for elusive growth after lost year for the economy

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Rishi Sunak was quick to declare victory in November when he met his goal of presiding over a halving of inflation. But the prime minister had less room for rejoicing over one of the other pledges he set out at the start of the year: his vow to grow the economy.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

18 Dec 2023

The story of 2023 has instead been one of near-stagnation — a lost year which was confirmed last week as the Office for National Statistics reported a 0.3 per cent drop in gross domestic product between September and October.

That left output no higher than in January. Activity is forecast to remain tepid next year with high borrowing costs and the legacy of the worst inflationary upsurge in a generation weighing on the economy.

“The country’s economic prospects remain quite bleak, frankly — we are treading water,” said Jagjit Chadha, director of the National Institute of Economic and Social Research. “Given the UK’s low productivity, I suspect growth will be imperceptible for the rest of the decade.”

The retreat in headline inflation to 4.6 per cent is now easing some of the