Sunday, May 26, 2024

UK economy falls 0.6% – could the country face a winter recession?

The Bank of England has braced the country for another recession this winter.

According to the Office of National Statistics, gross domestic product (GDP) has fallen by 0.6% – down from growth of 0.45 in May.

Last time the UK went into recession was in 2020 due to the coronavirus pandemic.

Experts have predicted that a UK recession could go well into 2023.

If GDP declines for two consecutive quarters – so six months in total – the economy is considered to be in recession.

GDP fall prediction

Governor Andrew Bailey estimates a GDP fall to 1.25% in 2023 and 0.25% in 2024.

If this happens, it would be the first case of two years of annual economic contraction since the 1960s.

The Bank of England issued its warning after raising interest rates to 1.75% in an attempt to cool inflation, which has hit a 40-year-high of 9.4%.

Cost of living crisis

Consultancy Cornwall Insight is predicting the energy price cap will reach £3,582 a year for the average household from October, rising again in January.

Chancellor Nadhim Zahawi said: “The government is providing billions of pounds of help for households with rising costs, including £1200 for eight million of the most vulnerable households.”

Sam Allcock
Sam Allcockhttps://www.abcmoney.co.uk
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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