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Britain’s economy shrank by 0.1 percent in this year’s second quarter, the national statistics agency reported, after growing 0.8 in the first quarter.
Analysts had foreseen a 0.2-percent reduction.
Spending on services puckered by 0.4 percent as COVID-related testing and vaccinations wound down, cutting back health care expenditures.
Overall, consumers spent 0.2 percent less during the quarter.
Spending declined as the quarter went on, sliding 0.6 percent in June, negating May’s 0.5-percent growth.
The holiday spanning two workdays to celebrate Queen Elizabeth’s 75 years on the British throne also dented productivity, the statistics office noted.
TREND FORECAST: The worst of the U.K. economy is yet to come. The people are being battered by record natural gas costs, which will rise again in October when the government adjusts upward the cap on the amount utilities can charge consumers for gas and electricity.
Largely because of that rise in energy costs, the Bank of England has predicted that inflation will climb to 13 percent in that month and that the U.K. will enter a recession in this year’s final quarter that will last through 2023.
Britain’s trade deficit also grew to a record 27.9 billion, roughly equivalent to $33.98 billion.
And despite the forecast for the U.K. to fall into recession this year, with the longest economic slump since 2008 being forecast, and inflation expected to climb to more than 13 percent, the Bank of England raised interest rates just 1.75 percent a week ago.
But when they did hike rates, the headline was that it was the biggest rise in 27 years. Biggest, does not count! With inflation soaring, the current interest rates will do nothing to slow down inflation…but it will slow down its already COVID War weakened economy.