Sunday , July 3 2022

British GDP contracted in Q2, the first since 2012.


Thus, according to the National Statistics Office (ONS), the United Kingdom registered a 0.2% contraction in its gross domestic product (GDP) between April and June, where economists forecast stability.

ONS said that the country's GDP has not declined since the fourth quarter of 2012. It increased by 0.5% in the first quarter when companies massively accumulated shares in anticipation of the country's exit from the country. European Union, then scheduled for 29 March. Therefore, third quarter data will be particularly carefully considered when it is released this fall.

On Thursday, the currency was already sanctioned by the announcement that the British prime minister could hold general elections in the immediate aftermath of Brexit, scheduled for October 31, noted Derek Halpeni and Fritz Louu, MUFG analysts. On an annual basis, economic growth reached + 1.2% compared to + 1.4% expected.

The problem for Boris Johnson and his team is that the activity of the country, one of Europe's most prosperous economies, is fluctuating – even before Brexit.

"These stocks were reduced in the second quarter, which affected the manufacturing sector, accompanied by slow construction demand and a weakened services sector," he added. But the deadline was delayed twice because of the refusal of the House of Commons to vote on the exit agreement negotiated by then Prime Minister Teresa May with Brussels. Other sectors of production are affected and industrial production is down 1.4%.

The pound stumbled upon the release of figures, approaching its lowest level in two years against the euro and in two and a half years against the dollar. Services, which are generally dominant in the UK economy, reported very weak second quarter growth, providing the only but modest support for second quarter activity. In the late afternoon the sterling lost 0.64% to EUR 1.0785.

Source link