UK’s Economic Recovery Slows in Third Quarter


The British economy’s recovery slowed over the summer, delaying its return to pre-pandemic size as shortages of supply hampered businesses and slumped exports.

Gross domestic product grew by 1.3 percent It fell 5.5 percent in the third quarter from 5.5 percent in the previous three months, the Office for National Statistics said on Thursday. The growth was driven by spending on services, particularly hotels, restaurants and entertainment, as the last of the major pandemic restrictions were lifted in July and people were vacationing in the country. The return to face-to-face doctor appointments also boosted growth data.

In other sectors, however, the recovery was weaker. Retail sales fell as much as auto sales global semiconductor shortage. Supply chain disruptions and bottlenecks hindered the growth It is in the UK and is expected to take longer than previously anticipated. A problem affecting other countries, including Germany. has been Reserves in UK ports and difficulties in distributing goods.

Changes in immigration and trade due to Brexit, including fewer European Union workers and a stricter customs regime. exacerbated supply bottlenecksAccording to the Office of Budget Responsibility, which provides independent estimates for the British government.

Exports fell nearly 2 percent from the previous quarter, partly due to the decline in exports of transportation equipment and machinery.

The UK’s “unique Brexit-related problems”, including additional customs paperwork, food safety controls and barriers to non-scheduled trade with its largest trading partner, the European Union, are “no doubt increasing port and transport challenges,” said economist Kallum Pickering. He wrote a note to customers.

The slowing momentum in the world’s recovery from the pandemic has led to lower global and British growth forecasts. The Bank of England said last week that the British economy will grow 7 percent this year and will cut its forecast by a quarter point. It cut a full percentage growth to 5 percent for 2022, as supply cuts put pressure on the economy through the end of the year and the annual inflation rate is projected to rise to about 5 percent by the spring.

Bank of England possibly Need to raise interest rates As prices rose in the coming months, he expected more official data on what was happening in the labor market after the government-backed leave program ended in September. The central bank said more than a million jobs had benefited from the program when the program ended, and that there may have been a small increase in unemployment as these payments ended. With tighter monetary policy, the bank has to stabilize inflation without derailing the recovery.

While recovery is expected to continue to slow, National Institute of Economic and Social Research He warned this week that as prices rise, fiscal stimulus dwindles and British households will be “bitterly squeezed”. tax increases It will come into effect in April. The London-based agency also said the number of households unable to meet basic needs could double as a major government aid program is cut.



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