What has been UK’s gross domestic product in recent months?
What do economists predict about the UK economy in the coming months?
How has the election affected UK’s economic performance?
What is the OECD forecast for the UK GDP?
According to the Office for National Statistics, the UK GDP fell 0.3 percent last April. Experts expected the economy to grow by an average of 0.1 percent in April. However, this is the first time since January last year that all major sectors of the British economy have helped reduce GDP.
Unprecedented inflation and rising costs
As the unbridled rise in the cost of living and unprecedented inflation continues in the UK, the latest statistics show negative economic growth in the country and approaching the recession stage that the Bank of England had previously warned. The Bank of England is expected to raise interbank interest rates for the fifth time. According to the BoE, the inflation index will exceed 10% by the end of the year, and the country will enter a period of economic recession.
Risk of recession in the UK
The Confederation of British Industry (CBI) issued a statement urging the government of Boris Johnson to take all necessary measures to prevent the risk of recession. The report said that in less than 40 days until the summer parliamentary recess, the government has begun a countdown to take the necessary steps. In this connection, the CBI has reduced its prospects for economic growth in the UK. According to the outlook of this British institution, the GDP index will reach 3.7% at best instead of 5.1%, and next year it will be only 1% instead of 3%. “It won’t take much to tip us into a recession. And even if we don’t, it will feel like one for too many people,” said Tony Danker, director general at the CBI.
Economic crisis after the Brexit
Last week, The Economist wrote in a report that the current economic situation in the UK is a chronic crisis exacerbated by the country’s exit from the EU. The Economist added: the UK is stuck in a 15-year rut. It likes to think of itself as a dynamic, free-market place, but its economy lags behind much of the rich world.
There is plenty of speechifying about growth and no shortage of ideas about how to turn the country round. But the mettle and strategic thinking that reform requires are absent—another instance of Tories ducking hard choices. According to the Economist, UK’s exit from the EU has worsened its economic situation. Commercial investment is less than when the UK Government held the referendum. Since 2020, companies doing business with the EU have faced increased administrative bureaucracy, customs delays and higher taxes. In the last quarter of 2021, the UK exported 16% less than at the end of 2019, while global trade in goods grew by nearly 6%.
OECD forecasts the UK GDP
The Organization for Economic Co-operation and Development (OECD) announced last week that UK GDP would grow 3.6 percent this year, the weakest forecast for 2023 among all G20 countries. Reacting to the latest statistics, British Chancellor of the Exchequer Rishi Sunak claimed that the government was not alone in dealing with the blow caused by rising inflation and the consequences of Russia’s invasion of Ukraine. “Countries around the world are seeing slowing growth, and the UK is not immune from these challenges,” he said. The UK government, which charges a tax of about 80 pence per litre of fuel sold in the country, decided last month to deduct five pence. Experts believe this decision is a drop in the ocean.
Economists predict British economic growth.
According to surveys, the poor economic situation has become a daily concern for half of the British, and a section of the population has turned to not eating or reducing meals. The CBI says the economy has been under the most pressure since the 1950s and will stagnate in the summer if the government does not act. The ONS said that after the country’s GDP fell by one-tenth in March, it also shrank by three-tenths of a percent in April, thus threatening the British economy with a risk of recession.
Economic experts in the UK estimate that the country’s economic growth in the quarter ending April will be one-tenth of one percent. The Confederation of British Industry has warned that if the government cancels an agreement with the EU on the border with Northern Ireland, a British trade war with the EU will break out, further disrupting the economy. “These figures are extremely worrying and will add to the concern families are still feeling about their finances and the long-term health of our economy,” said Rachel Reeves, the UK’s shadow chancellor of the exchequer, citing economic statistics.
The declining trend in UK GDP
According to official sources, the country’s official statistics show that the country’s monthly GDP is declining, and we should probably expect a recession and economic crisis. A report by the ONS shows that the country’s gross domestic product (GDP) fell for two consecutive months in March and April, and the British economy shrank. According to the report, the gross domestic product of the United Kingdom decreased by three-tenths of a percent in April, which is a decrease of one-tenth of a percent compared to the previous month (March), and productivity in all sectors of construction, production and services has decreased sharply. The ONS has identified the decline in coronavirus test-and-trace and vaccination programmes as a factor affecting the UK economy.
Conclusion
While the cost of living in the UK has become a crisis, the economy is in trouble. With rising energy bills and rising inflation, UK GDP, especially in key industry sectors, services and construction, has been declining. A country’s GDP is one of the most important indicators used to assess the economy’s performance. When GDP rises, the general perception is that the country’s economy is performing well; declining GDP often results in lower wages, fewer jobs, and lower consumption.
