UK Recession

Recent data has shed fresh light on why the UK has emerged as the standout underperformer among G7 economies since the onset of the pandemic, according to Pantheon Macroeconomics, and slower growth in household spending accounts for much of the difference.

The Bank of England (BoE) won applause from within the Citigroup foreign exchange business on Friday for its upfront acknowledgement of the UK economic car crash in progress and simultaneous steely resolve to go on doing whatever is necessary to drive inflation back to the two percent target level.

The UK economy contracted less than was expected last quarter but its foundations are weakening with financial distress growing as a constraint within the small business sector and lynchpin of the labour market.

The maintenance of free trade with the rest of the EU is fast becoming the top priority for Theresa May and her government, with potentially positive consequences for sterling.

The UK economy is now contracting and is expected to do so into 2017 while inflation is forecast to pick up towards 2%.

The UK construction sector unexpectedly declined in June; heralding the start of what some analysts believe will be a recession that will last for three quarters.

Will the UK fall into recession following the Brexit vote? According to a number of leading analysts the answer is yes, while another research house says the outlook is not all bad.