Economy narrowly avoids recession despite December slump

The UK economy narrowly avoided a recession in the second half of last year, new figures reveal today.

The Office for National Statistics (ONS) reported that output between October and December was flat 0 per cent.

The economy shrank between July and September. A recession is defined as when the economy contracts for two consecutive three-month periods.

But in December alone the economy fell by 0.5 per cent partly due to strikes across health, trains and the Royal Mail.

The Bank of England still expects the UK to enter recession this year.

However, it will be shorter and less severe than previously thought.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: "Although technically we 've managed to avoid entering a recession, this morning GDP figures present a sombre picture as output fell across a number of sectors.

"Many city analysts are predicting a shallower recession that initially projected. However, this will do little to boost the confidence of embattled businesses that are feeling the pitch and trying to overcome the fallout from rocketing energy bills, labour market disruption and rising interest rates - all of which are having a direct impact on consumer spending and long term growth.

"Locally, data from our latest Quarterly Business Report revealed that the majority of firms remain confident that their profits will increase or stay the same over the next 12 months which is testament to their underlying resilience.

"Time is of the essence and it 's clear the Government will need to pull the right fiscal levers at the upcoming Budget to create a platform for business growth. ”