Fears that the UK could be heading for its first recession in a decade have been stoked by grim official figures showing that the economy contracted in the second quarter of 2019.
Brexit uncertainty, car plant shutdowns and the running down of stock built up before the original end of March deadline for Britain’s EU exit resulted in gross domestic product shrinking by 0.2% in the three months ending in June.
News - Office - National - Statistics - Fall
News from the Office for National Statistics of the first fall in quarterly GDP in six and a half years sparked immediate speculation that a further bout of Brexit jitters leading up to the new 31 October departure date could lead to a second successive quarter of negative growth – the technical definition of a recession.
The chancellor, Sajid Javid, said: “This is a challenging period across the global economy, with growth slowing in many countries. But the fundamentals of the British economy are strong – wages are growing, employment is at a record high and we’re forecast to grow faster than Germany, Italy and Japan this year.
Government - Certainty - People - Businesses - Brexit
“The government is determined to provide certainty to people and businesses on Brexit – that’s why we are clear that the UK is leaving the EU on 31 October.”
John McDonnell, the shadow chancellor, said: “Today’s dismal economic figures are a direct result of Tory incompetence. The Tories’ Brexit bungling, including Boris Johnson now taking us towards no-deal, is breaking the economy.”
Product - GDP
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The pound fell to a 31-month low of just over $1.20 against the US dollar after the news, amid concerns in the currency markets that the government is preparing for a no-deal departure from the EU. Sterling has dropped by 3% against the US currency since Boris Johnson became prime minister last month.
David - Cheetham - Market - Analyst - XTB
David Cheetham, the chief market analyst at XTB,...
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