The UK Office for National Statistics will release the country’s second quarter GDP growth rate today, with data expected to
The UK Office for National Statistics will release the country’s second quarter GDP growth rate today, with data expected to show a 21% decline.
The figures will mark the second consecutive quarter of GDP decline, confirming that the UK’s economy is officially in recession. The contraction is expected to be the biggest quarterly drop of any G7 economy, owing to the late implementation of lockdown controls and a slow rollback of restrictions. While the Bank of England held its benchmark borrowing rate unchanged at a record low of 0.1% at last week’s Monetary Policy Committee (MPC) meeting, Governor General Andrew Bailey said that negative interest rates at this time, though still a policy option, could be less effective as a tool to stimulate the economy.
Expect a strong recovery in consumer spending to encourage a rebound in the retail and services sectors. However, continued concerns about health risks and fears over job security are likely to impact consumer confidence in the long term, slowing recovery to at least the end of 2020.
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