2023-06-23 19:42:53
UK private sector growth has slowed to a three-month low as rising interest rates and soaring inflation fueled by soaring food prices exacerbate the cost of living crisis, data showed today.
This comes with the British government announcing measures to help mortgage holders following their high costs due to the increase in interest rates, such as increasing the non-payment period and allowing customers to pay debt service only for six months, or extending the mortgage period to reduce monthly payments.
The figures released on Friday highlighted Britain’s economic hardship, piling pressure on Prime Minister Rishi Sunak.
The Standard & Poor’s Purchasing Managers’ Index (PMI) in the UK fell to 52.8 in June from 54 in May.
A number above 50 indicates growth in activity, while a number below that indicates a decline.
“The June Purchasing Managers’ Index survey shows that the UK economy has lost momentum once more following an uptick in growth during the spring, and looks set to weaken further in the coming months,” Chris Williamson, senior economist at Standard & Poor’s Global Market Intelligence, said in a statement. , especially since “consumer spending on services, which was a major driver of growth in the spring, is now showing signs of faltering.”
He added that “it was the reality of rising interest rates, rising cost of living and pessimism regarding future prospects, which counteracts the effects of a short boost in spending.”
Official data this week showed that the annual inflation rate in the United Kingdom reached 8.7 percent in May, unchanged from April, which caused the Bank of England to raise its main interest rate on Thursday more than expected.
The half-point increase approved by the Bank on the main interest rate is the thirteenth in a row.
Economists expect rates to reach six percent this year, which might lead the United Kingdom into recession, similar to the eurozone.
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