Bank of England says UK recession is modest in historical terms

Bank of England Gov. Andrew Bailey says the U.K.’s economic recession, which was confirmed last week, is modest by historical standards and is probably over

Bank of England Gov. Andrew Bailey said Tuesday that the U.K.’s economic recession that was confirmed last week is modest by historical standards and is probably over.

In testimony to lawmakers, Bailey said the two successive quarters of negative growth recorded in the second half of 2023 — the standard by which the U.K. measures a recession — add up cumulatively to a 0.5% reduction in the country's annual gross domestic product.

“If you look at recessions going back to the 1970s, this is the weakest by a long way," he said, adding that the upturn is probably already underway.

Last week, the Office for National Statistics said economic activity declined by 0.3% in the fourth quarter of the year from the previous three-month period. That followed the previous quarter's 0.1% fall, which meant that the British economy is considered to be in recession.

Ben Broadbent, the deputy governor of the Bank of England, said the recession talk over the past few days has been “unhelpful." He suggested there was the possibility that upward revisions in the future may mean that a recession never actually took place.