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Britain’s economy contracted 0.2 percent in this year’s third quarter and considering the socioeconomic and geopolitical trends it will continue to shrink through the winter.
In September alone, productivity was down 0.6 percent, due significantly to business closures following Queen Elizabeth’s death.
The slump was spread across both manufacturing and services, holding the U.K.’s total economic output below its pre-COVID level.
With inflation at 10.1 percent in September, the Bank of England has vowed to continue raising its key interest rate to tame inflation, even as the higher rates raise the chances of what central bank officials have predicted will be a recession lasting as long as two years.
Soaring energy costs and widespread inflation worsened by Russia’s invasion of Ukraine and resulting Western sanctions are part of the problem.
However, the U.K. “is also suffering from a series of self-inflicted wounds by the governing Conservative party,” The New York Times noted. Financial markets and the pound sterling crashed in September when new prime minister Liz Truss announced the most sweeping array of tax cuts since 1972, then proposed massive borrowing to subsidize home energy bills.
The short-lived plan caused widespread financial damage before Truss withdrew much of it and then resigned.
Rishi Sunak, Truss’s successor, is due to unveil a new budget this week that will “reinforce Britain’s grim economic outlook” with spending cuts and tax increases, analysts at Pantheon Macroeconomics wrote in a note to clients.
“There is a tough road ahead, one that will require extremely difficult decisions to restore confidence and economic stability,” treasury minister Jeremy Hunt said in an 11 November public statement.
TREND FORECAST: It’s here, it’s alive but the mainstream media will not call a spade a spade. The U.K. is in Dragflation: Negative economic growth and rising inflation.
Adding moronics to stupidity by making a bad situation much worse, the U.K., with a multi-centuries unbroken warmongering track record, is now stealing more money from its people to keep banging the war drums and enriching the military industrial complex.
Having already committed nearly $4 billion to fight the Ukraine War, yesterday its Prime Minister Rishi Sunak announced Britain will spend £4.2 billion ($4.9 billion) on five new frigates from defense giant BAE Systems to
bolster security “in the face of increased Russian threats.”