By Olga Cotaga and Tommy WilkesSterling skidded again yesterday, almost equalling a 10-year low against the euro, after an unexpected second quarter contraction in the UK economy alarmed investors already fretting that the UK is headed for a no-deal Brexit. The pound slid to 93p against the euro, a level only seen once before since 2009 when it hit 93.5p.Sterling, which has also lost 3.7% of its value against the dollar since arch- Brexiteer prime minister Boris Johnson’s arrival in office in late July, sank to $1.2056, the weakest it has been since January 2017.The British currency has been close to being the worst performing in the developed world in the past couple of weeks since Johnson became prime minister on July 24.The UK’s economy shrank at a quarterly rate of 0.2%, the first contraction since 2012 and below all forecasts.Year-on-year economic growth slid to 1.2% from 1.8% in the first quarter, the UK’s Office for National Statistics said, its weakest showing … [Read more...] about Sterling nears 10-year low as UK GDP shrinks
Uk gdp forecast
UK growth forecast revised to 1.3 percent by EY
The UK-based economic forecasting group EY ITEM Club has lowered its forecast for UK growth to 1.3 percent in 2019 and 1.5 percent in 2020, warning prolonged Brexit uncertainties will continue to dent the UK economy in the coming quarters. “Despite likely solid-looking GDP growth in the first quarter of 2019, the downward revision for 2019 primarily reflects the prolonged Brexit uncertainty, following the decision to delay the UK’s exit from the EU to a flexible Oct. 31 deadline,” EY ITEM Club said in its latest spring forecast. A weaker global economic environment has also impacted the UK’s growth outlook, it said. The EY ITEM Club forecast consumer spending growth to slow in the near term, expecting it to grow by 1.4 percent in 2019 and 1.7 percent in 2020. It projected consumer price inflation to average at 1.9 percent in 2019 before rising to 2.0 percent in 2020. “A notable feature of the economy in 2018 and Q1 2019 was how resilient consumer spending … [Read more...] about UK growth forecast revised to 1.3 percent by EY
Manufacturing trade bodies urge EU leaders to work with UK to avert no-deal Brexit
Two influential trade bodies in the manufacturing industry have warned the European Union the sector is “woefully unprepared” for a no-deal Brexit. In a letter sent to each of the 27 EU heads of state as well as the bloc’s chief negotiator Michel Barnier, Make UK and Ceemet called on leaders to work with the British government to avoid no-deal. Read more: British car makers go ahead with temporary factory shutdowns Make UK and its European sister organisation Ceemet represent more than 200,000 manufacturers, supporting 35m jobs. Stephen Phipson and Uwe Combuchen, Make UK and Ceemet’s respective chiefs, wrote: “While Ceemet recognises the preparations the EU and the UK have made towards mitigating the damage from a no deal exit, it must be clear that neither the EU nor the UK are ready, and as a consequence European industry is also not adequately prepared, for this cliff edge scenario. “The integrated complexity of the just in time supply chains of … [Read more...] about Manufacturing trade bodies urge EU leaders to work with UK to avert no-deal Brexit
IMF cuts global growth forecasts and lays out cost of no-deal Brexit
The UK economy will grow by less than previously thought in 2019 according to the International Monetary Fund (IMF), which has slashed its growth predictions for all of the world’s advanced economies. Read more: IMF director says majority of countries will see growth slow in 2019 A no-deal Brexit “could potentially have large and long-lasting negative impacts on the economies of the United Kingdom and the European Union”, the IMF’s World Economic Outlook report, released today, also said. In more bad news for Europe’s biggest economy, the IMF said Germany will now grow just 0.8 per cent in 2019, meaning the organisation has cut its growth prediction for the country by over half since October in two consecutive downgrades. Last week Germany’s manufacturing sector was shown to have sharply contracted in March, while on Monday it was revealed that imports and exports were both lower than expected. UK GDP is set to expand 1.2 per cent in 2019 should it … [Read more...] about IMF cuts global growth forecasts and lays out cost of no-deal Brexit
Business confidence in UK hits lowest ebb since financial crisis
Business confidence has crashed to the lowest point since 2012, and the economy is only growing because firms are stockpiling ahead of Brexit, according to a key sentiment indicator. The BDO optimism index, which charts how businesses expect output to develop in the next three to six months, fell faster in March that at any time since the bleakest days in the aftermath of the Lehman Brothers collapse in 2008. The figures suggest that the UK economy could struggle to post any positive growth in 2019, BDO said. The fall in confidence has been led by the previously robust services sector. “In absolute terms, sentiment is now weaker than its previous low point after the UK’s vote to leave the EU in 2016,” the BDO said. “The services sector, which comprises around 80% of UK GDP, drove the overall decline in confidence with the sector index falling by a dramatic 4.15 points to 95.13 in March.” BDO’s separate output index, which measures UK business output … [Read more...] about Business confidence in UK hits lowest ebb since financial crisis