UK recession doom torn apart as Britain on track to grow more than France and Germany
Britain's resilience displayed in the growth projections offers a glimmer of hope, challenging the initial doom surrounding the UK's economic outlook.
Britain is set to make a major comeback after hitting a recession at the end of 2023, with positive forecasts indicating it could outperform France and Germany in the coming years.
Official figures released on Thursday by the Office for National Statistics revealed that the British economy contracted by 0.3 percent in the fourth quarter of 2023, surpassing economists' expectations of a 0.1 percent decline.
This marks the first recession for the UK since the initial wave of the COVID-19 pandemic in the first half of 2020.
But the Organisation for Economic Co-operation and Development (OECD) projects a positive trajectory for the UK, forecasting a growth rate of 0.7 percent in 2024 and 1.2 percent in 2025.
The outlook positions Britain ahead of economic powerhouses France and Germany, although still trailing behind Spain, Canada, and Australia.
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The OECD report reads: "Europe is also feeling the demand-reducing effects of policy tightening. The United Kingdom has a similar profile, with growth picking up from 0.3 percent in 2023 to 0.7 percent in 2024 and 1.2 percent in 2025."
German Chancellor Olaf Scholz is under increasing pressure to turn the economy around after a long period of stagnation.
The International Monetary Fund (IMF) has also predicted that Germany will be the slowest-growing major economy in 2024 at 0.5 percent.
The IMF has forecasted Britain's economy to grow by 0.6 percent. Constanze Stelzenmuller, director of the Center on the United States and Europe at the Brookings Institution, made a stark warning for Germany's economy.
As quoted by CNN, she said: “It outsourced its security to the US, its export-led growth to China, and its energy needs to Russia.
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"It is now finding itself excruciatingly vulnerable in an early 21st century characterised by great power competition and an increasing weaponisation of interdependence by allies and adversaries alike.
The unexpected downturn in the UK is posing challenges for the ruling Conservative Party, particularly as a general election looms later this year.
Prime Minister Rishi Sunak is under pressure, with opinion polls indicating a significant lead for the main opposition Labour Party.
Chancellor Jeremy Hunt attributed the economic challenges to high inflation, emphasising the government's commitment to its plan despite the tough times.
“Low growth is not a surprise," Hunt said. "Although times are still tough for many families, we must stick to the plan — cutting taxes on work and business to build a stronger economy."