The UK economy fell into recession during the final three months of last year, according to official figures.
The Office for National Statistics reported a sharper than anticipated decline in Gross Domestic Product (GDP), a crucial indicator of economic activity, by 0.3%.
This comes after a 0.1% contraction between July and September. A recession in the UK is defined as consecutive declines in GDP over two consecutive quarters.
These figures present a setback for Prime Minister Rishi Sunak, who pledged to foster economic growth as one of his five commitments in January 2023.
Meanwhile, Chancellor Jeremy Hunt is nearing the unveiling of the latest Budget in less than three weeks.
The actual decline of 0.3% in the final quarter of last year was worse than the widely predicted 0.1% drop by financial markets and economists.
The Office for National Statistics noted a slowdown across all major sectors measured to assess the economy’s health, including construction and manufacturing.
Despite this, the economy grew by 0.1% for the year as a whole.
“While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat,” said Liz McKeown, director of economic statistics at the ONS, said:
Sources from the Treasury have informed BBC News that the chancellor is considering a more substantial reduction in public spending as a means to implement tax cuts.