Is Britain On The Brink Of Recession?

According to the financial times, a number of recent official figures have led economists to worry about whether Britain will fall into the crisis of economic recession and predict that the growth of the UK economy will be at a standstill in the second quarter.

Office for Natio Nal Statistics (ONS) latest statistics show that in May (2019), GDP rebounded to 0.3% from 0.4% in April, but overall, the output in the second quarter is still less than that in the first quarter.

These data reflect the poor performance of the British economy in the first half of this year. No matter which candidate (Boris Johnson or Jeremy Hunt) is elected as the new Prime Minister of the UK, it is imperative to solve the possible economic recession as soon as possible. However, economists' predictions are different. Yael Selfin, chief economist of KPMG, said that the worsening situation of the British service industry is particularly worrisome. Pantheon Macroeconomics economist Samuel Tombs said that strong consumption power will drive economic growth and predict that it will gradually improve in the future.

The growth of economic output in May came from car manufacturers restarting the production line, as the decline in output in April was attributed to the advance of the annual downtime maintenance project to the month in order to meet the deadline of the end of March. According to the data, the output of the second season so far is lower than the average level of the first season, and a slight decline in June data will shrink the second quarter. The growth rate of the services sector slowed by 0.3% in the three months to May, compared with the previous 3 months. The industry stagnated in May, and the financial and insurance industry contracted 0.7%.

With the PMI survey in June showing that the economy is approaching recession, business and household surveys also point to pessimistic vision. Chris Williamson, chief business economist of IHS Markit, which provides the PMI index, said that the uncertainty of Britain's off Europe caused double worries such as global economic sluggish, spending and investment reduction.

Azad Zangana, a senior European economist at Schroders investment group, said that no matter whether Britain reached an agreement or not, it would eventually need to reduce its backlog, which is expected to lead to further economic contraction.