Monthly real gross domestic product (GDP) in the UK is estimated to have fallen by 0.5% in December 2022, following an unrevised growth of 0.1% in November 2022, according to research by the Office for National Statistics (ONS).

Monthly GDP is now estimated to be 0.5% below its pre-coronavirus (Covid-19) levels (February 2020).

Looking at quarterly and annual figures, GDP was flat in the three months to December 2022, and annual GDP output is estimated to have grown by 4.1% in 2022, following growth of 7.4% in 2021.

December’s figures showed that the services sector fell by 0.8% in December 2022, after unrevised growth of 0.2% in November 2022.

The largest driver of the fall in services in December 2022 was human health and social work activities, which fell by 2.8%. This was driven by a 4.2% fall in the human health activities industry, which saw broad falls across the industry. This included fewer GP appointments and operations, partly because of the impact of strikes. A second consecutive fall was seen in the NHS Test and Trace and vaccine programmes, especially vaccination activity.

Chancellor Jeremy Hunt said the figures showed ‘underlying resilience’ but said ‘we are not out of the woods’. The Bank of England still expects the UK to enter recession this year. But it thinks it will be shorter and less severe than previously forecast.

Hunt, who the BBC spoke to for the government's position, said that high inflation remains a problem and continues to cause ‘pain for families up and down the country’. Inflation is slowing but at 10.5% remains close to a 40-year high.

A recession is typically defined as when the economy shrinks for two consecutive three-month periods.

According to the BBC, most forecasters now predict 2023 will see a milder downturn than previously expected because of a fall in energy prices. But some think the UK will avoid a technical recession completely.

There was an upbeat take from the National Institute of Economic and Social Research, an economic think tank, which forecast that the UK will swerve a recession. But both the Bank of England and the International Monetary Fund were gloomier, expecting the UK economy to shrink in 2023.

Meanwhile, further ONS figures showed that output in consumer-facing services fell by 1.2% in December 2022, following growth of 0.4% in November 2022 (revised up from 0.2%).

Production output grew by 0.3% in December 2022, following growth of 0.1% (revised up from a 0.2% fall) in November 2022. The main contributor to this growth was electricity, gas, steam and air conditioning supply.

The construction sector was flat in December 2022 after a fall of 0.5% (revised down from being flat) in November 2022.