UK Economy Shows Greatest Signs of Distress Since 2012

The UK is showing signs of stress since the Eurozone crisis and fears of a double-dip recession six years ago. Reports also said that the British economy shows the steepest fall in manufacturing output and highest degree of pessimism among employers since 2012.

Survey reports from ManpowerGroup, a British recruitment firm, show that concerns over Brexit and High Street spending slowdown are some of the contributing factors towards 2018 as the worst time in six years for British firms.

In addition, a quarterly poll of about 2,000 major employers from nine different industry sectors in the country found a net balance of only 4 percent, which plans to hire more staff rather than to cut back.

The Bank of England (BOE) and the United Kingdom government watched the poll for early warnings of hiring spurts or downturns.

Meanwhile, the finance and banking industry has the weakest outlook from the survey. It has the worst outlook since the depths of the financial crisis happened almost 10 years ago. Job cuts are also suggested on the way over the summer.

Falling steel and electrical machinery demand contributed to the UK’s sharpest drop of factories output for more than 5 years. As a result, the production output fell 1.4 percent in April compared from the previous month, according to the Britain’s Office for National Statistics (ONS).

Slow Economic Growth

Britain’s GDP growth rate only stood at 0.2 percent in the three-month period to May. It was up 0.1 percent in the same period ending in April.

Amit Kara, Niesr’s head of UK macroeconomic forecasting said, “Economic growth has slowed materially since the start of this year and it continues to remain weak.”

According to the ONS, the overall industrial output in April dropped 0.8 percent compared with the previous month. Declines in factory production and energy & water usage led the fall.

On the other hand, the figures could make it harder for the BOE to raise interest rates in early August; although observers point out that factories account for only around 10 percent of the overall economy.

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