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With Britain on the cusp of recession, 'doomsters' may be proven right
Brexit uncertainty has acted like a handbrake on business activity and dictating corporate caution
When Boris Johnson became prime minister he said the “doubters, doomsters, gloomsters” had got Britain wrong.
After that first speech on the steps of Downing Street, the prime minister faces an early test, with official figures suggesting the economy is on the cusp of recession.
GDP contracted in the three months to June by 0.2%, the first decline in a quarter since 2012 when the nation risked a double-dip recession amid the weak recovery from the financial crisis.
Q&A What is gross domestic product (GDP)?
Should the economy fail to do anything more than stagnate in the third quarter, a technical recession would be confirmed. Economists reckon there is a one in three chances of such an outcome, even if the UK avoids leaving the EU without a deal.
The National Institute of Economic and Social Research said it expects growth will likely return in the third quarter. But a lack of positive momentum and recent business surveys suggest output could falter again.
Sajid Javid blamed the drop in GDP on challenging conditions in the world economy, and talked up Britain’s resilience. He also argued that Britain would outpace EU rivals such as Germany and Italy this year.
The dramatic drop in sterling is only a taste of what is to come
Sam Gyimah
Read more
Bad news for our biggest trading partners tends to be bad news in Britain, given the high degree of integration in EU supply chains. Donald Trump’s trade war with China has served as a handbrake on global growth, sapping business confidence and sinking factory output around the world.
However, the unique Brexit headwinds also played a role.
Planned factory shutdowns by carmakers around the original 29 March Brexit deadline were behind much of the slump in the second quarter, contributing to the largest quarterly fall in manufacturing for a decade.
The sugar rush for the economy from companies stockpiling goods has also faded. Growth had raced ahead to 0.5% in the first quarter as firms bought supplies at the fastest rate on record for a G7 economy. But with reasonably adequate supplies the new orders have dried up, hitting economic output.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Finally, the general cloud of Brexit uncertainty has acted as a handbrake on business activity in recent months. Business investment fell by 0.5%, as corporate caution due to the recent political turmoil weighed on spending decisions.
The service sector was the only silver lining. Consumers have propped up growth in recent months by tuning out from the Brexit warnings and carrying on shopping. An acceleration in wage growth, stable inflation and record employment has helped.
Javid said he was not expecting a recession “at all” for Britain, but the chances have certainly risen sharply.
https://www.theguardian.com/busines...sp-of-recession-doomsters-may-be-proven-right
jos jedan tezak udarac za lokalne krezube *******ne sendvicare krah eu i krah britanije je blizu mogu komotno da izvese belu zastavu
Brexit uncertainty has acted like a handbrake on business activity and dictating corporate caution
When Boris Johnson became prime minister he said the “doubters, doomsters, gloomsters” had got Britain wrong.
After that first speech on the steps of Downing Street, the prime minister faces an early test, with official figures suggesting the economy is on the cusp of recession.
GDP contracted in the three months to June by 0.2%, the first decline in a quarter since 2012 when the nation risked a double-dip recession amid the weak recovery from the financial crisis.
Q&A What is gross domestic product (GDP)?
Should the economy fail to do anything more than stagnate in the third quarter, a technical recession would be confirmed. Economists reckon there is a one in three chances of such an outcome, even if the UK avoids leaving the EU without a deal.
The National Institute of Economic and Social Research said it expects growth will likely return in the third quarter. But a lack of positive momentum and recent business surveys suggest output could falter again.
Sajid Javid blamed the drop in GDP on challenging conditions in the world economy, and talked up Britain’s resilience. He also argued that Britain would outpace EU rivals such as Germany and Italy this year.
The dramatic drop in sterling is only a taste of what is to come
Sam Gyimah
Read more
Bad news for our biggest trading partners tends to be bad news in Britain, given the high degree of integration in EU supply chains. Donald Trump’s trade war with China has served as a handbrake on global growth, sapping business confidence and sinking factory output around the world.
However, the unique Brexit headwinds also played a role.
Planned factory shutdowns by carmakers around the original 29 March Brexit deadline were behind much of the slump in the second quarter, contributing to the largest quarterly fall in manufacturing for a decade.
The sugar rush for the economy from companies stockpiling goods has also faded. Growth had raced ahead to 0.5% in the first quarter as firms bought supplies at the fastest rate on record for a G7 economy. But with reasonably adequate supplies the new orders have dried up, hitting economic output.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Finally, the general cloud of Brexit uncertainty has acted as a handbrake on business activity in recent months. Business investment fell by 0.5%, as corporate caution due to the recent political turmoil weighed on spending decisions.
The service sector was the only silver lining. Consumers have propped up growth in recent months by tuning out from the Brexit warnings and carrying on shopping. An acceleration in wage growth, stable inflation and record employment has helped.
Javid said he was not expecting a recession “at all” for Britain, but the chances have certainly risen sharply.
https://www.theguardian.com/busines...sp-of-recession-doomsters-may-be-proven-right
jos jedan tezak udarac za lokalne krezube *******ne sendvicare krah eu i krah britanije je blizu mogu komotno da izvese belu zastavu
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