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U.K. GDP Is Projected To Decline, Recession Is On The Horizon?

U.K. GDP Is Projected To Decline, Recession Is On The Horizon?| FXMAG.COM
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  1. Previous data and expectations of downward
    1. Generla outlook
      1. Recession

        The outlook for Britain’s economy is very challenging. Slowing economic growth and a changing fiscal policy are a major concern for the British.

        Previous data and expectations of downward

        Monthly GDP changes suggest a downward trend. After the reading in September, the GDP M/M index returned to the level of zero. It is expected to decline from -0.3% to -0.4%.

        As shown by the data, for a significant part of the year the monthly change was weak, even negative.

        u k gdp is projected to decline recession is on the horizon grafika numer 1u k gdp is projected to decline recession is on the horizon grafika numer 1

        Source: investing.com

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        The quarterly change of the index, despite the fact that it is currently in a positive position, it is expected that the next reading will be negative. the downward trend in GDP q / q continues and has recently reached the level of 0.2%, the current expectations are at -0.5%

        The annual change is also in a downward trend. GDP Y / Y is expected to reach 2.1%. Since the end of 2021, it has been at a low level of less than 10%, but despite several positive and quite high readings this year, the British economy shows signs of weakening.

        The official data about the indicator will be announced on Friday, November 11.

        u k gdp is projected to decline recession is on the horizon grafika numer 2u k gdp is projected to decline recession is on the horizon grafika numer 2

        Source: investing.com

        Generla outlook

        The Bank of England's forecasts are particularly difficult to put together, given the government's as yet unclear fiscal strategy.

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        The Bank of England forecast last month that Britain would slip into a recession at the end of 2022 and not come out of it until early 2024.

        Food and energy prices have jumped, in part because of the Ukraine war, which has left many households facing hardship and started to drag on the economy.

        A recession is defined as when a country's economy shrinks for two three-month periods - or quarters - in a row.

        Typically, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services such as health and education.

        The unemployment rate is now at its lowest in 50 years, but is expected to rise to almost 6.5%.

        The forecast predicts an increase in the unemployment rate and a decline in household income.

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        It is a picture of a painful economic period in which the UK is doing worse than the US and the euro area.

        Recession

        For most people, economic growth is good. It usually means there are more jobs. Companies are more profitable and can pay employees and shareholders more. The higher wages and larger profits seen in a growing economy also generate more money for the government in taxes. When the economy shrinks, all these things go into reverse. This is signal that recession is coming.

        However, the pain of a recession is typically not felt equally across society, and inequality can increase. Some people may lose their jobs, and unemployment could rise. Graduates and school leavers could find it harder to get their first job. Others may find it harder to be promoted, or to get big enough pay rises to keep pace with price increases.

        The results are already visible after the recent decisions of the Bank of England. Higher loan costs are already affecting households. Home buyers with tracking or floating rate mortgages will immediately feel the pain of an interest rate hike.

        These are just a few simple examples, but a recession can have long-term consequences for the citizen and the economy as a whole.

        Source: investing.com

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