British economy remains under pressure

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Forex humour

23-12-2024 11:51

British economy remains under pressure

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The British economy is having a tough time again! Analysts report that the UK’s GDP has shrunk for the second month in a row. It is the first time in four years.

According to research, the economy contracted by 0.1% for the second consecutive month. This marks the first significant decline in GDP since spring 2020. As a result, the UK’s economy is back in the gloomy days of COVID lockdowns, anxiously awaiting the Labour government’s first budget. Rachel Reeves, the UK’s Chancellor of the Exchequer, calls this situation deeply concerning.

She and Prime Minister Keir Starmer had previously warned that tax hikes would be part of the new budget. Reeves admits that while the measure is unpopular, it is necessary. “While the figures this month are disappointing, we have put in place policies to deliver long-term economic growth,” Rachel Reeves stated.

However, the opposition Conservatives are skeptical about the effectiveness of these measures, blaming Labour’s cabinet. The National Institute of Economic and Social Research is adding fuel to the fire by predicting economic stagnation in the fourth quarter of 2024. Most experts had expected a modest 0.1% rise. "The services sector flatlined, while output in the manufacturing and construction industries declined in October's data," the research highlights.

The British economy has been on a rollercoaster for quite some time. In October 2023, it unexpectedly shrank by 0.3% month-on-month, a sharper drop than analysts had anticipated. Spring did not bring much relief either, especially with elections around the corner that ultimately brought Labour to power. Paul Johnson, director of the Institute for Fiscal Studies (IFS), describes the UK’s current financial state as the most challenging in 70 years. Analysts note that the new government is struggling to deal with labor shortages. They may even resort to recruiting citizens serving time as part of the "Get Britain Working" plan.

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Forex humour