SAWT BEIRUT INTERNATIONAL

| 8 February 2023, Wednesday |

UK economy rebounds from royal funeral hit, outlook remains bleak

The British economy recovered from the one-time public holiday marking Queen Elizabeth’s funeral in September a little more robustly than was anticipated in October, but a recession was still projected, according to official figures released on Monday.

Following a 0.6% decline in September, the gross domestic product increased by 0.5%, according to the Office for National Statistics.

A 0.4% rebound was predicted by an economist survey conducted by Reuters.

The British economy recovered from the one-time public holiday marking Queen Elizabeth’s funeral in September a little more robustly than was anticipated in October, but a recession was still projected, according to official figures released on Monday.

Following a 0.6% decline in September, the gross domestic product increased by 0.5%, according to the Office for National Statistics.

A 0.4% rebound was predicted by an economist survey conducted by Reuters.

In the three months to October, Britain’s economy shrank by 0.3%, a smaller fall than a median forecast for a 0.4% contraction in the Reuters poll but the biggest drop since early 2021 when the country was under tight coronavirus restrictions.

The Bank of England – which looks set to raise interest rates for a ninth meeting in a row on Thursday to contain the risks from an inflation rate above 11% – said last month that Britain’s economy looked set for a two-year recession if interest rates rose as much as investors had been pricing.

Even without further rate hikes, the economy would shrink in five of the six quarters until the end of 2023, it said.

“Tightening monetary policy too aggressively could risk worsening the financial outlook for firms and households, and extend the looming downturn,” said Suren Thiru, economics director at ICAEW, an accountancy trade body.

The ONS said the economy in October was 0.4% larger than before the pandemic set in.

The ONS said consumption of electricity and gas was the biggest drag on economic growth in October, which was the seventh-warmest on record, according to the Met Office.

“The estimated drop may also indicate some changes in consumer behaviour in response to recent energy price rises,” the ONS said.

An increase in COVID-19 vaccinations in October added 0.1 percentage points to the monthly increase in GDP.

    Source:
  • Reuters