Britain’s gross domestic product (GDP) rebounded slightly by 0.2% in July, following a 0.6% decline in June, driven in particular by the services sector, the Office for National Statistics (ONS) announced on Monday. .
On the other hand, the production and construction sectors fell over the period, specifies the ONS, in the midst of a crisis in purchasing power in the United Kingdom which poses the threat of an entry into recession at the end of the year.
Britain’s GDP was 1.1% above its pre-pandemic level, but still remains slightly below its level in May.
‘The small rebound of 0.2% in July is due to the weakness of GDP in June’, a month marked in particular by the impact of the celebrations for the jubilee of Queen Elizabeth II – who died last Thursday – which gave rise to two days not worked, one more than usual, explains KPMG economist Yael Selfin.
Another additional public holiday has been announced for next Monday for the sovereign’s funeral, meaning the UK economy will experience two more non-working days than a normal year in 2022.
‘More worryingly, July’s GDP remains below the level seen in May, indicating an overall contraction in the first two months of the summer,’ she added, as Britain’s economy was under threat of a downturn. ‘a recession’ due to the continued pressure on household incomes and the increased cost burden for businesses’.
The Bank of England announced at the beginning of August that it was forecasting a recession from the end of 2022 and for more than a year, due to inflation at more than 10% driven in particular by the surge in energy prices since the start. of the Russian invasion of Ukraine.
New British Prime Minister Liz Truss on Thursday unveiled a two-year energy price freeze for individuals and six months for businesses or public institutions, in an attempt to stem the soaring cost of living.
The measure has not been precisely costed by the government but will cost more than 100 billion pounds, according to the think tank specializing in public finance IFS.
The British government also intends to boost growth through all-out tax cuts.
/ATS