Latest News On Uk Economy – The UK is likely to be hardest hit by Covid-19 among major economies, the Organization for Economic Co-operation and Development has warned.
The British economy is likely to slump by 11.5% by 2020, slightly ahead of what is said to be in the countries of Germany, France, Spain and Italy.
Latest News On Uk Economy
If there was a second peak in the pandemic, the UK economy could contract by as much as 14%.
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He said that in what is called “semarium one”, with no second peak, he could see a contraction of 11.4% in France, 11.1% in Spain, 11.3% in Italy, 6.6% in Germany.
In its latest assessment, the OECD found that Britain’s largely service-based economy had been hit particularly hard by the government’s restrictions.
In response to the think tank’s report, Chancellor Rishi Sunak said the UK was not the only one to suffer: “In common with many other economies around the world, we have seen the significant impact of the corona virus on our country and our economy.
“We have taken unprecedented action to support vital people and businesses through the economic disruption, ensuring our economic recovery is as strong and as fast as possible.”
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Shadow chancellor Anneliese Dodds said: “Today’s evidence from the OECD is very worrying, showing that the UK is particularly exposed when the coronavirus crisis hits.
“The failure of the health government resulting in the crisis, the delay in the lockdown and the chaotic evil coming out of the lockdown make the economic impact of this crisis worse.”
The central finding of the OECD forecasts is that the expectation or hope of a rapid recovery in the economy – a chart from the so-called 5-shape – is not happening now.
As General Secretary Angelo Gurria put it to me, it will be “U-shaped”, the question is how long it will be at the bottom of this “U”.
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And in the event that there is no longer a peak, the UK is predicted to be the worst hit this year, although Italy and France are slightly worse.
For that, as the glass is half full, it also predicts the strongest growth in the UK at 9% for 2021. But that is a hollow reward.
The reason is that the UK’s business economy is exposed to its own unique services and sectors of the city.
This blow comes despite a much-lauded rapid response to keep tens of billions of workers on the payroll.
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The OECD also mentions the economic impact of the pandemic “compounded” due to the likely failure of the surrounding to trade deals with the EU and new trade barriers with the European Union at the end of the year.
It is recommended to extend the UK’s stay in one market. It is a policy that no government should follow.
The bigger point is that the OECD clearly shows that this is not enough to deliver the package.
Late last week, the Germans announced a big 4% stimulus to the economy, including a cut in VAT and significant subsidies for buying cars.
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The invitation to the table is more of a covenant. And soon enough we’ll get actual hard economic data that goes against forecasts like this, when the monthly GDP figures for April – completely closed – are published on Friday.
The OECD said the pandemic has begun to recede in many countries and activity has begun to pick up, but it does not expect a convincing recovery. The outlook for public health is particularly uncertain.
OECD chief economist Lawrence Boone said the pandemic had “severe and long-lasting consequences for people, firms and governments”.
She added: “Extraordinary measures will be required to walk the tightrope to recovery.” Although growth is picking up in some sectors, overall activity will be muted for some time.”
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The OECD looked at two scenarios for how the pandemic would unfold, depending on whether or not there would be another wave of infections before the end of this year.
If that happens, two countries – France and Spain – will suffer even more serious declines in economic activity than this year in the UK.
The report describes both forms of sobriety, but either way, the deep recession now unfolding was followed by a slow recovery.
In a more serious scenario, the global economy could shrink by 7.6% this year, says the OECD.
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That figure is significantly worse than predictions put out by other agencies, such as the International Monetary Fund and the World Bank, which have warned of a higher level of uncertainty attached to their forecasts.
By the end of 2021, the report says five or more years of income growth could be lost in many countries. He says the impact on livelihoods is particularly severe among vulnerable groups.
The OECD also says that the pandemic has matured a shift from what it calls “great integration” to “great disruption”.
That is essentially a disadvantage to globalization, which includes additional trade and investment restrictions and many borders closed at least as long as the health crisis persists. UK economic growth slowed between July and September due to supply chain problems preventing recovery, the latest official figures show.
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But that fell in other areas of the economy, leaving three-month growth at 1.3%.
It means the economy is 2.1% smaller than in the last three months of 2019, before the coronavirus pandemic hit.
Dona Fitzner, ONS chief economist, said increased service growth had helped buyers rush home to do deals before the end of the stamp duty holiday.
Growth slowed significantly from the 5.5% rise recorded between April and June when many Covid restrictions were lifted.
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The ONS said the UK expanded less than initially thought in July and August, leading them to revise down growth figures for both months.
“What happened before in July and August, we had a pingdemic.” said Sarah Hewin, head of research for Europe and the Americas at Latin Chartered. “And that ends up holding the economy flat.”
“The economy continues to recover from Covid and given the schemes as a supply, unemployment has fallen eight times for eight months in a row and we predict that we will have the fastest growth of the G7 this year,” he said.
Kirsty Davies-Chinnok, from the Polish Professional Services (PPS), told the company that the refining of metals such as stainless steel and aluminum had been busy until 2021.
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The managing director said the manufacturing industry “really didn’t stop for most of 2020 and continued to grow.”
It led to PPS deciding to invest further in its operations, despite initially thinking it was “too risky” because of the pandemic, Ms Davies-Chinnok added.
“We’ve had three price increases this year, which is unheard of,” Ms Davies-Chinnok said. “But we can’t do business with our customers when our suppliers are increasing their costs to us.”
He added that PPS, which is a very energy-intensive business, was “incredibly lucky” in that it renewed its energy contract in December, before gas prices skyrocketed worldwide.
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Longer term, Ms Davies-Chinnok said the biggest threat to her sector “has to be climate change” and said industry and government should be looking at ways to make energy greener.
Business leaders have expressed caution about the outlook, with Suren Thiru, head of economics at the British Chambers of Commerce, saying data points to the UK economy “only likely to return to pre-pandemic levels next year, behind many of our international competitors.”
“Although monthly output rebounded during the quarter from July’s contraction, this is more likely to reflect a temporary boost from the easing of restrictions, rather than a significant improvement in the UK’s underlying growth trajectory,” he said.
The ONS highlighted the impact of supply chain problems, which businesses have struggled with for several months as they adapt to shortages and disruption of work at mainland ports.
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Stocks from manufacturers fell in the fourth quarter of July in September, the ONS said. And the slowdown in new UK car sales has been largely due to a global shortage of microchips. The ONS also noted that retailers are reporting “lower than usual” stock at this time of year.
As expected, the UK’s economic recovery from the coronavirus restrictions slowed in the third quarter of the year between July and September.
The fact that this happened a little less than expected, and the G7 European economies are lower than others, confirms some concerns about the strength of the recovery in the face of supply chain challenges and consumer weakness.
The economy has not yet recovered from the pandemic with its losses. On a four-base basis, the gap is still 2.1% and will not be filled until next year. Using monthly data, it is smaller.
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The good news is that the service sector has almost completely recovered from the pandemic’s losses, which would unlock the impact of the vaccine program on reviving the economy.
The challenge now is navigating some current global and local issues, as the Bank of England will start raising rates, and there are tax bills and energy bills.
The latest growth figures were weaker than many economists and Paul had thought
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