The United Kingdom’s (UK) GDP decreased by 0.2% in the third quarter (Q3) of the year, and its aftermath might result in a recession. Economists have predicted a protracted slump in the standard of living and the country’s GDP if adequate measures are not taken.
The UK’s primary assessment team revealed that the country’s economic performance in Q3 was satisfactory despite its decline. Economists had proposed that the UK’s GDP would diminish by 0.5% in Q3. Therefore the Q3 report was appreciated by economists and public analysts, Refinitiv reported.
What Could be the Effects of the UK’s GDP Diminish?
The decline in the country’s GDP signals economic recession; adequate measures should be implemented to avert such occurrence. The UK’s GDP has also performed below expectations since the year’s second quarter. Her economy declined by 0.1% in the second quarter (Q2) and 0.2% in Q3.
According to a report from the Office for National Statistics, ” there was a decline in the activities of the production and construction firms in Q3. Outputs from production firms declined by 1.5%, comprising 13 sub-sectors of the production industry.”
The UK’s apex financial institution, Bank of England(BOE), has predicted that the country will experience a prolonged recession. BOE revealed that the UK GDP’s decline in Q3 would persist till 2024 if adequate measures are not put in place. Also, the unemployment rate in the UK will skyrocket by 6.5% in the subsequent two years.
The Mission to Recover United Kingdom’s GDP
The commonwealth has been facing a remarkable cost of living catastrophe prompted by reduced revenues from erupting energy. The apex financial institution imposed huge hikes on interest tariffs. The imposed interest rate has been the highest in the country since 1989.
The country’s GDP declined in September by 0.6% during the burial of Queen Elizabeth II. However, Finance Minister Jeremy Hunt will disclose a modified fiscal policy schedule in the subsequent week. His policies will encompass tangible tax slants and moderating government expenditures.
UK Prime Minister Rishi Sunak stated that “tough decisions” have to be made as a measure to Solidify the UK’s economy. Economists have suggested that BOE and the Finance Minister should formulate policies to save the economy. In addition, Dutch Bank ING has advised BOE to scrutinize the proposed budget and ensure that it will address the economic needs of the citizens.