The UK’s Gross Domestic Product (GDP) for January showed stagnation, according to data from the country’s Office for National Statistics.

Economic growth stagnated even before the start of the conflict in the Middle East. GDP remained at 0%, reflecting a slowdown compared to the 0.1 % growth in December.

Pressure on British Finance Minister Rachel Reeves has been mounting, and analysts indicate that the outlook could worsen due to rising energy prices, “a consequence linked to international tensions following the US and Israeli attacks on Iran on February 28.”

In this regard, the minister stated: “Our economic plan is the right one, although we know there is still much to be done,” referring to initiatives to “reduce the cost of living, decrease the national debt, and create conditions for growth that benefits all regions of the country.”

The economic recovery during January fell short of expectations, resulting in weak growth and fragility in key sectors such as the British labor market.

M.Pino

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The most recent report from the UK Office for National Statistics puts the number of companies that have filed for bankruptcy between April and June at 5,629. The figure far exceeds that recorded for the same quarter between 2015 and 2019, when the pandemic appeared.

The high costs of services, including gas and electricity, affect this decision of certain companies to declare insolvency, according to the ONS. The bureau adds rising prices for raw materials as well as disruptions to supply chains.

During the time that the Covid-19 pandemic has lasted, the British government has been implementing packages of financial support measures not only for companies but also for citizens.

However, in the case of companies with a workforce of less than 50 workers, the hardships have increased. It is estimated that among the most affected sectors is manufacturing, construction and hotels.

In August, according to a survey carried out by the ONS, at least 11 % of companies indicated that they perceived a risk, between moderate and low, of falling into bankruptcy.

M.Pino

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Source: swissinfo

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Compared to the second quarter of last year, UK GDP grew by 2.9 %. In this way, the British economy stood at the end of the second quarter of 2022 at 0.6 % above the level prior to the Covid-19 pandemic.

In the second quarter, service sector activity contracted 0.4 %, while production increased 0.5 % and construction activity grew 2.9 %.

On its side, real household spending between April and June fell 0.2 %, due to falls in tourism, clothing and footwear, food and non-alcoholic beverages, as well as restaurants and hotels. This was partially offset by increases in spending on transportation, housing and health.

Likewise, government consumption spending fell for the second consecutive quarter, decreasing by 2.9 % in the second quarter of 2022. This was due to lower health spending, which reflected falls in activities related to Covid-19.

The UK goods and services trade deficit improved to 4.7 % of nominal GDP in the second quarter of 2022, from 5.4 % in the first three months of 2022.

In the month of June, the second-largest economy in Europe suffered a contraction of 0.6 % compared to the previous month, when it had grown by 0.4 %.

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Source: dpa

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