As the impact of the Queen’s burial continues to play out in UK growth numbers, there is no dramatic turnaround in output to celebrate.
According to preliminary official data, the economy resumed growth in October. However, experts predict that this may be the final time for some time that the economy shows growth.
The Office for National Statistics (ONS) recorded growth of 0.5%, following a loss of 0.6% in September, which was mostly attributed to the disruption of normal business caused by the Queen’s funeral bank holiday.
The partial recovery in October, which was slightly greater than analysts had predicted, was largely attributable to the number of working days returning to normal rather than a genuine production increase.
The ONS determined that wholesale and retail activities — both of which were considerably impacted by closures as a mark of respect for the late Queen — contributed most to the economic growth.
Thus, experts continue to anticipate that a recession will be confirmed before the end of the year.
This is because it is anticipated that output would be negative during the current fourth quarter as a whole, following a 0.2% decline in the previous quarter ending in September.
Both the Bank of England and the Office for Budget Responsibility, which has already declared that the United Kingdom is in recession, anticipate that the slump will continue through 2023 but remain mild.
As a result of high inflation, primarily caused by Russia’s war in Ukraine, economic activity has slowed, reducing consumer spending.
To limit inflation, the Bank has hiked interest rates, which has resulted in higher borrowing costs and a further decline in demand.
In addition, fixed-rate mortgages have failed to return to levels observed before the September mini-budget, which caused financial markets to reject the expenditure plans of the then-Liz Truss-led government.
“High inflation, exacerbated by Putin’s illegal war, is reducing development across the globe, with the IMF estimating that one-third of the global economy will be in recession this year or next.
“While today’s numbers indicate modest development, I must admit that the road ahead is arduous.
Like the rest of Europe, we are susceptible to the repercussions of Covid-19, Putin’s conflict, and high global gas costs.
“Our strategy has restored economic stability and will help reduce inflation next year, while also laying the groundwork for long-term prosperity through record-breaking investments in new infrastructure, science, and innovation.”
It is largely anticipated that the Bank, which raised its rate by 0.75 percentage points last month, will increase it by an additional 0.5 percentage points this week.
It anticipates a reduction in energy-driven inflation shortly, but inflation is expected to remain elevated at 11.1%, the highest level in 41 years.
According to analysts polled by the Reuters news agency, November’s figures are projected to reveal an annual rate of 10.9%.
