In the third quarter of 2022, the British economy declined by 0.2 percent but is expected to decline further in the fourth quarter, which is expected to United kingdom towards one Recession before the end of the year. The Bank of England (BoE) expects the next recession to be the longest since records began, the 1920s, and has warned that unemployment, currently at a 50-year low, could nearly double, or 6.5%, by 2025. The Bank of England believes that the economy has entered a downward spiral that will continue into the next year and into the first half of the year 2024, the year in which the next parliamentary elections are scheduled.
Among the reasons for the expected recession there is first and foremostinflation. Rising food, fuel, and energy prices have put many families in limbo, as they grapple with the biggest cost-of-living crisis since the 1950s. The fact that they have been forced to cut back on their spending inevitably has a negative impact on growth. Business is not in minor difficulties, as with the tightening of consumer spending on the one hand and the increase in raw material and energy prices on the other. Treasury Secretary Jeremy Hunt warned of the need for “extremely difficult decisions to restore confidence and economic stability”. Hunt is expected to present his decisions on government spending and taxes next week.
The UK is not the only country facing hyperinflation and a real risk of recession, yet it is among the countries whose economy is showing the greatest signs of suffering compared to other developed countries. Not only that, but it is still below the pre-coronavirus pandemic level. In the second quarter of 2022, the British economy is still at -0.4% compared to the fourth quarter of 2019. The European Union depends more on gas supplies from Russia than the United Kingdom, which should suffer less from the consequences of the energy crisis. that struck the continent in connection with the Russian invasion of Ukraine. However, we should not forget that London is more dependent on gas imports. Not only that, but the country also suffered the most in the first year of the coronavirus pandemic, also and above all as a result of the government’s approach to Brexit. This made it more complicated for companies – starting with smaller ones – to trade with the continent, and it also limited the national economy’s access to the European workforce. The result is that the UK economy is now less productive and resilient than before.
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