The economy shrank by a larger than expected 0.3% between October and December last year, revealed the Office for National Statistics (ONS).
The figures show that the UK officially fell into recession, as it failed to grow for two successive quarters, and retailers have said they have seen this reflected in their sales. Prime minister Rishi Sunak pledged to grow the economy in January 2023.
Sue Nithyanandan, of Costcutter, Epsom, Surrey, said: “It doesn’t surprise us at all. We’ve noticed people spending a little bit less – it’s slowly building up. People are holding onto their money. Our prices haven’t changed, but people might be more conscious.”
David Lomas, owner of Lomas News in Bury, said with wages yet to go up, the UK’s financial situation will be “compounded”.
He said: “I don’t know what the answer is, or how we fix it. There’s no hope. Sales were down last year, and I’ve noticed it’s not improved this year, and January and February have been [slow]. As much as people appear to be spending money on frivolous thing, they’re cutting back. It’s going to be compounded in April when the wages go up again. People think they’ll get more money, but things will go up in price. It’s an absolute false economy. I’ll either have to find £200 a month to cover wages, or take a £200 a month pay cut.”
Gagandeep Singh, of Nisa, Hitchin, Hertfordshire, said customers are a lot more “savvy” nowadays, so the news didn’t shock him at all – even though he saw sales up last quarter.
He added: “The cost-of-living crisis means people have pulled back on spending. I was actually up about 4% [in sales] at the end of last year, but because inflation was more than that, it may be that the recession impacted me too.”
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