The UK economy is probably already in recession, according to Bloomberg. Of the recent events that particularly contributed to this sad event for the British, one can name the collapse of the pound sterling. The devaluation of the pound not only increased inflation, but also discouraged businessmen from investing in production, which is one of the main drivers of a “healthy” economy.
In addition to the national currency of Albion, one of the reasons that gave Bloomberg reason to make such a disappointing conclusion for Britain was the S&P Global private sector index, which in September fell to 48.4 points for London from 49.6 points in the last summer month. Economists had forecast a higher figure of 49.
The conclusion that a recession is coming to the British Isles was also helped by a study that showed a record decline in consumer confidence, clearly showing the new prime minister, Liz Truss, what she will have to deal with inside the kingdom.
Today, September 23, by the way, her government plans to unveil a package of measures to boost economic growth and protect consumers from surges in electricity and gas prices.
“The economy is likely already (sliding) into recession,” Bloomberg quoted Chris Williamson, chief economist at S&P Global Market Intelligence, as saying. “There are big problems with supplies, energy prices are rushing up, import prices are rising due to a weak pound … All this only strengthens pressure…”
Williamson also draws attention to the deteriorating economic performance in the S&P study. Their decline indicates that the economic downturn recorded at the beginning of the year has turned into a recession.
The Bank of England, the British central bank, notes a decline in the kingdom’s economy in the second quarter and makes a disappointing forecast that the decline is likely to continue in the third quarter. Recall that for the onset of a technical recession, it is necessary to reduce GDP for two quarters in a row.
Market research firm GfK Ltd. reported a five-point drop in consumer confidence to 49 in September, the lowest reading since 1974, when the economic index began to be tracked.
“Consumers are barely breathing under the pressure of rising living standards (in the British Isles),” explains GfK’s Joe Stanton. “Now everyone is wondering when and how this situation will improve.”