Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
NEWS

Slowdown warnings flash for UK economy as inflation surges

Published On :

By Andy Bruce and William Schomberg

LONDON (Reuters) – Britain’s economy is heading for a slowdown, or possibly even a recession, as consumers and businesses are hit by the leap in inflation, higher taxes, rising interest rates and uncertainty caused by the war in Ukraine.

Bank of England Governor Andrew Bailey said on Thursday the BoE was walking a tight line between tackling inflation and avoiding a recession.

So far, finance minister Rishi Sunak has resisted to calls to add to his support for households.

Below is a series of graphics showing some of the signs of the strain on the world’s fifth-biggest economy.

TOUGH TIMES AHEAD FOR UK ECONOMY – IMF

Britain’s economy will slow in 2022 and faces weaker economic growth and more persistent inflation than any other major rich nation in 2023, the International Monetary Fund forecast this week.

The IMF said its downgrades for 2022 and 2023 reflected “elevated inflation pressures” and tighter monetary policy.

 

Graphic: IMF predicts weakest growth, highest inflation for UK in G7 next year – https://fingfx.thomsonreuters.com/gfx/polling/lbpgnyomjvq/Pasted%20image%201650630827843.png

INFLATION SURGES

The consumer price index jumped to 7% in the 12 months to March, a 30-year high, and is set to go higher in April when big hikes in power tariffs kicked in. The government’s budget forecasters said in March that inflation could touch almost 9% later this year, depending on energy prices.

Graphic: UK inflation still has some way to go before peaking – https://fingfx.thomsonreuters.com/gfx/polling/znpnemzmdvl/Pasted%20image%201650632738174.png

CONFIDENCE NOSEDIVES

Consumer confidence slumped this month to close to its lowest level since records began nearly 50 years ago, market research firm GfK said on Friday. The report sent a recession warning signal.

Among businesses, optimism dropped for the third month running in April and was the lowest since October 2020, according to the S&P Global/CIPS composite Purchasing Managers’ Index.

Graphic: Are recession bells ringing? – https://fingfx.thomsonreuters.com/gfx/polling/klvyklzjjvg/Pasted%20image%201650631563377.png

SPENDING

Spending in shops by consumers fell more than expected in March, adding to a slip in February, according to official data published on Friday. Volumes are above levels before the pandemic but are lower than they would have been without it.

Separate figures on Thursday showed spending on card payments was 105% of its February 2020 average level in the week to April 14 as work-related spending – includes the purchasing of petrol and diesel – jumped.

Graphic: UK retail sales losing momentum – https://fingfx.thomsonreuters.com/gfx/polling/xmvjoylqwpr/Pasted%20image%201650632107519.png

SHRINKING PAY, SAVINGS FALL

Britons’ inflation-adjusted earnings shrank by the most since 2013 in the three months to February, according to official data.

As the squeeze on earnings tightens, households have been using savings they built up during the coronavirus pandemic. The amount of money households save as a percentage of gross disposable income plus pension accumulations fell back to close to its pre-pandemic level in the last three months of 2021.

Graphic: UK pay, excluding bonuses, falls in real terms – https://fingfx.thomsonreuters.com/gfx/polling/gdvzyawaypw/Pasted%20image%201650633098615.png

EMPLOYMENT HIGH, TOTAL WORKFORCE DOWN

The number of employees in Britain is above its pre-pandemic level, providing a source of strength for the economy. But the total size of the workforce, including self-employed people, remains lower than it was in February 2020.

Graphic: More employees, but fewer people in work overall – https://fingfx.thomsonreuters.com/gfx/polling/gkvlgkxqopb/Pasted%20image%201650632545498.png

BANKS BRACE FOR BAD LOANS

British lenders expect loan defaults to rise over the coming months and also plan to rein in mortgage lending by the greatest amount since the early days of the COVID-19 pandemic, a Bank of England survey showed earlier this month.

Graphic: UK lenders expect to see defaults on personal loans rise: BoE – https://fingfx.thomsonreuters.com/gfx/polling/zdvxogrjlpx/Pasted%20image%201650632639747.png

(Reporting by Andy Bruce and William Schomberg; Editing by Catherine Evans)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts