Bank of England estimates that economy will have a period of recession; Finance minister speaks of “difficult path”
The 1st estimate of UK GDP (Gross Domestic Product) indicated a drop of 0.2% in the 3rd quarter of 2022 (from July to September). In addition, data released by the ONS (Office of National Statistics) on Friday (11.Nov.2022) show that GDP in September fell by 0.6% compared to August.
According to the ONS, the Queen Elizabeth II state funeral holiday affected the data recorded in September. “Some businesses closed or operated differently in this time. This should be considered when interpreting seasonally adjusted movements involving September 2022 and, to a lesser extent, estimates for the 3rd quarter of the year.” it says the communiqué.
The agency’s data show that there was no growth in the production of services between July and September, representing a deceleration compared to the high of 0.2% in the 2nd quarter.
The Bank of England stated on 3 November that the British economy was close to entering a 2-year economic recession. However, this would only become a reality if interest rates were raised to 5.2%. The institution also said that it did not expect such a high level, which would imply a shorter period of recession.
This Friday morning (Nov 11), UK Finance Minister Jeremy Hunt said not have “illusion that there is a difficult road ahead”, demanding decisions “extremely difficult” for “restore confidence and economic stability🇧🇷
He also said that the country “is not immune to the global challenges of high inflation and slow growth”, according to him, driven by the “Putin’s illegal war [Vladimir Putin, presidente da Rússia] in Ukraine”, its weaponry and gas supply.
Achieving long-term sustainable growth, says Hunt, will require “control inflation, balance accounts and reduce debt”.
“There is no other way. As the world economy faces extreme turmoil, the fundamental resilience of the UK economy is cause for long-term optimism.” concluded.
#GDP #drops