UK growth slows, recession looms
Reuters and Bloomberg
Britain’s economy grew less than expected in July, raising the risk that it is already in recession, with sharp rises in energy prices hurting power demand and soaring material costs hitting the building sector.
With inflation at a 40-year high of over 10%, gross domestic product rose 0.2% from June, official data showed yesterday, weaker than a median forecast of 0.4 %.
In the three months to July, GDP remained stable compared to the previous three-month period.
Some economists said yesterday’s data suggested the economy could be on the verge of contracting in the July-September period after contracting 0.1% in the April-June quarter.
“It would mean the UK would enter a technical recession for the first time since the end of lockdown restrictions,” said Jake Finney, economist at PwC.
Meanwhile, the euro jumped 1.6% to US$1.0198, its biggest rise since March, as Bundesbank President Joachim Nagel said the central bank needed to take further action. if the picture of inflation remained the same. The European Central Bank raised its key rate by an unprecedented 75 basis points last week to curb the fastest pace of growth in consumer prices on record.