In the News Teaching Activity – Surprise growth for the UK economy in the fourth quarter, 2024 (Feb 2025)

The UK economy narrowly avoided a technical recession in late 2024, with GDP edging up by 0.1% in the fourth quarter, according to the ONS.

Despite the surprise, though very modest growth, the UK economy remains fragile. As economics correspondent, Ed Conway notes, GDP per capita has been shrinking, indicating worsening living standards. While December’s uptick in services and manufacturing prevented contraction, the overall picture is still rather bleak, with stagnant growth since the last election. Business confidence remains low amid rising costs, tax burdens, and global economic headwinds, including potential U.S. trade tariffs. With downgraded growth forecasts expected, the government faces mounting pressure to deliver tangible economic improvement, though the positive growth rate for Q4, however slight, was better than was anticipated.

Economy shows surprise growth at end of 2024 - but living standards hit | Money News | Sky News

1. Explain the terms ‘economic growth’ and ‘technical recession’.

2. Assess the potential benefits and costs of near-flatlining economic growth.

3. Evaluate growth-promoting policies the government could use to meet the anti-growth headwinds.