High inflation rates in the country are likely to create a prolonged recession
Economic forecasters are anticipating tough times ahead for Britain after recent official statics have revealed that the economy shrank in the last three months until September. The official statistics which were revealed on Friday, November 11, suggest they anticipate the economy to further shrink in the months to come.
According to a report from the Associated Press, the Office for National Statistics, who revealed these figures, said that the country´s gross domestic product fell by 0.2% between July and September, which signals the start of a long recession. The report further adds that the GDP further shrank by 0.6% in September.
Meanwhile the Bank of England also recently announced an increase in its main interest rates last week to 3%, three-quarters of a percentage more than before, the biggest increase in the last three decades.
The report also said that the U.K. economy is now 0.2% smaller than what it was in February 2020. This was just before the lockdowns caused due to the COVID-19 pandemic which shut down major parts of the economy for months.
The biggest hit to the economy came after the former Prime Minister Liz Truss announced a package of unfunded tax cuts, which worsened the country’s Finanancial situation. The report also adds that, the announcement of the package resulted in bringing the value of a British pound against the US dollar to a record low.
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