The UK economy went into recession at the end of last year, it has been confirmed.
The findings are a massive blow for Rishi Sunak, who made growing the economy one of his five key pledges to voters shortly after he entered 10 Downing Street.
But figures released this morning by the Office for National Statistics showed that gross domestic product (GDP) shrank by 0.3% in the final three months of 2023.
With the economy also contracting by 0.1% between July and September, that means the UK was technically in recession in the second half of the year.
Despite the gloomy news, chancellor Jeremy Hunt insisted the economy is “turning a corner”.
He said: “High inflation is the single biggest barrier to growth which is why halving it has been our top priority. While interest rates are high - so the Bank of England can bring inflation down - low growth is not a surprise.
“But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low.
“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.”
Shadow chancellor Rachel Reeves said: “Rishi Sunak’s promise to grow the economy is now in tatters.
“The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.
“This is Rishi Sunak’s recession and the news will be deeply worrying for families and business across Britain.”
Lib Dem leader Ed Davey said: “Rishi’s recession has savaged the British economy by decimating growth and leaving families to cope with spiralling prices.
“Years of Conservative chaos and a revolving door of Conservative chancellors has culminated in economic turmoil.”