Are we going to end 2023 with a recession after all? The great non-arriving recession of 2023 has so far confounded the forecasts of the Bank of England (which forecast a shrinking economy throughout 2023), the IMF (which forecast growth of -0.6 per cent over the course of the year) and others, too. But could the statisticians now be riding to the rescue of the forecasters’ reputations?
This morning the Office for National Statistics has revised its estimate that the economy flatlined in the third quarter of the year and now says it shrank by 0.1 per cent. It also revised downwards its estimate for the second quarter, from growth of 0.2 per cent to zero growth. It means that we are only the tiniest of whiskers away from being in a recession already (that being defined as two consecutive quarters of negative growth), and greatly increases the likelihood that Britain will be confirmed as being in recession once the figures for the fourth quarter are published in the New Year. The third quarter – at least on the ONS’s first estimate – began with a chunky fall of 0.3 per cent in output in October.
The brighter news is that retail sales volumes recorded an increase in November, of 1.3 per cent, up from zero in October. The rise was all-round – up 2.3 per cent in non-food, 0.8 per cent in food and 0.6 per cent in fuel. But we might need to be a little bit wary. According to the retailers themselves, some of the rise may have had to do with Black Friday sales being brought earlier, into November. We might expect, therefore, sales in December to be a little flatter than might otherwise have been the case.