The UK economy has shrunk for the first time in nearly seven years due to the un

Posted by qianjiu on August 20th, 2019

The British government released data on the 9th, indicating that the UK economy contracted in the second quarter, the first time since the fourth quarter of 2012.

According to the National Bureau of Statistics of the United Kingdom, from April to June, the UK's GDP fell by 0.2%.

Rob Kent Smith, head of the National Bureau of Statistics, said that the manufacturing and construction industries are shrinking, while the service industry, which usually dominates, has barely grown.

The Associated Press reported that the market had previously expected that the UK economy will experience zero growth in the second quarter, and the actual performance is surprising; the UK's economic contraction is due to the uncertainty of the UK's withdrawal from the European Union, which has put pressure on business investment, and the UK has been allowed to postpone After the European Union, the company reduced inventory.

On June 23, 2016, the United Kingdom decided to leave the European Union through a referendum. It was originally scheduled to leave the European Union on March 29 this year. However, the "Brexit" agreement reached between the United Kingdom and the European Union last November was repeatedly vetoed by the lower house of the British Parliament. The two sides agreed in April this year to postpone "Brexit" for up to six months to October 31 this year.

Before the British government applied for the extension of "Brexit", many companies intensified their efforts to cope with "no agreement to leave the EU", step up production and bulk purchases, and boost economic growth. In the first quarter of this year, the UK's GDP grew by 0.5% from the previous quarter.

The Associated Press reported that the UK economy's second-quarter performance was worse than expected, which may aggravate public concerns about the "Brexit" uncertainty affecting the UK economy; since 2016, UK business investment has been weak, in the second quarter of this year, Business investment fell further by 0.5%.

Chris Williamson, an economist at consulting firm IHS Marquist, said the National Bureau of Statistics showed that the UK economy is declining due to the slowdown in global economic growth and the impact of the UK's “Brexit” uncertainty. On the edge of recession.

If the UK economy shrinks for two consecutive quarters, it will mean that the economy is in recession. Mike Jackman, an economist at PricewaterhouseCoopers, said the UK's "Brexit" crisis and uncertainties in the global economic outlook made the UK economy difficult in the third quarter.

The Associated Press analyzed that the UK economy will not continue to shrink in the third quarter, as many automakers have earlier completed annual maintenance downtime and will begin operations in August. However, the British Parliament will end its summer recess in September, and the political debate surrounding "Brexit" will continue, and the uncertainty of Britain's "Brexit" will intensify. The Bank of England’s Bank of England warned on the 1st that even if the UK finally had a “Brexit” order, there would still be a one-third chance of a recession early next year.

Boris Johnson, the stalwart of the "Brexist", succeeded Teresa May as the British Prime Minister in July. He advocated that Britain must complete "Brexit" by October 31, even if the price is "no agreement to leave the EU." Bank of England Governor Mark Carney warned that “no agreement to leave the EU” could damage all sectors of the economy and the pound could continue to depreciate.

Agence France-Presse reported that the British government agency predicted in July that if the UK "no agreement to leave the EU", it may fall into a recession that lasts for one year. 

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