The British economy shrinks by 0.5% and recession fears increase

The British economy panicked in July after recording a 0.5% drop in GDP, which raised concerns among some economists due to… Risk of falling into recession. Many analysts joke that the economy could be like that It would have declined further had it not been for the impact of film release on consumption Barbie And Oppenheimer. The phenomenon known as Barbenheimer Movie theaters helped Repeats

The British economy panicked in July after recording a 0.5% drop in GDP, which raised concerns among some economists due to… Risk of falling into recession. Many analysts joke that the economy could be like that It would have declined further had it not been for the impact of film release on consumption Barbie And Oppenheimer. The phenomenon known as Barbenheimer Movie theaters helped It raised £160 million in July aloneAn increase of 78% over the previous month.

Analysts had expected a 0.2% decline in July. In June, UK GDP rose 0.5%. Since the end of 2021, the British economy has shown a downward trend recession, with successive increases and decreases month after month, without leading to a clear trend. In the macroeconomic context, Salaries rose 8.5% last year It already exceeds the inflation rate of 6.8%.

According to data published today by the Office for National Statistics (ONS), the reduction that month was due to bad weatherResulting in decreased sales in stores and restaurants, as well as… Strikes In sectors such as education and health (where 200,000 visits were cancelled). Impact on purchasing power High interest ratewhich now stands at 5.25%, although it is expected to rise next week, at least to 5.5%.

Between stagnation and growth

For his part, Economy Minister Jeremy Hunt stated that there are “many reasons to be confident in the future.” “we Among the most developed countries in the G7 [tras la última revisión del PIB] The IMF said we would do this more than Germany, France and Italy in the long term.

“Growth remains weak. We expect a stagnation in the economy for the rest of the year, although there are some forecasts.” Increased risk of recession “At the end of this year or at the beginning of 2024,” says Thomas Pugh, economist at consultancy RSM UK. For his part, Paul Dales, chief UK economist at Capital Economics, explains that this decline “may be intended Perhaps this soft recession has begun “What was expected.”

ONS Director of Statistics, Darren Morgan, explained that if the focus was broadened and growth in the quarter ending July was considered, the progress would be 0.2% and “The picture looks a little more positive“.