The previous month has been a landmark for the British economy. The end of October has finally put the record straight about a possible recession. It turns out that the country’s economy has already fallen into a recession.
In October, Britain’s economic conditions worsened dramatically. High energy prices, a number of interest rate increases, as well as political uncertainty have taken their heavy toll on the country. According to the Financial Times, UK economic activity collapsed last month. Experts are confident that what is happening can be safely described as a recession. After all, one of the main indicators - the purchasing managers' index (PMI) - lost 2 points at once and dipped to 47.1, the lowest level in almost two years. Moreover, the indicator remains below the 50.0 mark separating growth from contraction for a third straight month. This suggests a sharp slowdown in the nation's economic growth. Analysts at S&P believe that UK economic output will surely contract in the third quarter of this year.
Earlier, Goldman Sachs also voiced gloomy forecasts regarding a recession in the UK. The analysts predicted the UK economy would slip into a recession in the fourth quarter of 2022, with the risk that it could trigger a deep contraction. According to rough estimates, Britain’s gross domestic product could fall by around 1% by mid-2023, the agency noted.
Latest official data shows that the country's production output saw a decrease of 0.3% in the second quarter compared to the previous one. The trend is confirmed by manufacturers and other market participants.
