• 1 day The Gold Rally Has Finally Run Out Of Steam
  • 2 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 4 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 5 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 6 days Why 12 Million American Millionaires Isn’t Good News
  • 7 days Big Oil Is Paying The Price For Investing In Renewables
  • 8 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 9 days Did Amazon Just Democratize Prescription Drugs?
  • 11 days The Private Space Race Just Got Very Real
  • 12 days Short Sellers Are Willing Big In This Turbulent Market
  • 14 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 15 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 15 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 16 days Black Friday Could Be Retailers’ Only Hope
  • 17 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 18 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 20 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 21 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
  • 22 days Will The San Francisco Wealth Tax Spark An Exodus Of The Rich?
  • 23 days The Fin-Tech IPO Of The Century Just Got Crushed
Dead Malls Could Be Amazon’s Next Target

Dead Malls Could Be Amazon’s Next Target

Amazon is reportedly in talks…

Permanent Layoffs Are On The Rise

Permanent Layoffs Are On The Rise

One executive told CNBC they…

13-Minute COVID Tests Could Get Life Back To Normal

13-Minute COVID Tests Could Get Life Back To Normal

The United States, Canada and…

  1. Home
  2. Markets
  3. Economy

UK Economy Shrinks As Brexit Worries Grow

UK

Though it wasn't entirely unexpected, the UK economy contracted in Q2 for the first time in seven years as the cloud of uncertainty brought on by the kingdom's looming exit from the European Union discouraged business investment and prompted some consumers to put off major purchases as well.

For the three months ended June, GDP contracted 0.2% compared to the previous quarter, according to the Office for National Statistics. That's lower than what experts had expected (they had forecast growth to be flat). The biggest drag was a drop in manufacturing output, which caused the production sector to shrink by 1.4%. Construction also weakened while critical service sector yielded no growth at all.

The contraction marks the first time the UK economy has shrunk since 2012.

The contraction comes amid rising fears that Britain could crash out of the European Union on Oct. 31 without a deal as negotiations with the EU remain at an impasse. Prime Minister Boris Johnson has committed to leaving on Oct 31. with or without a deal, causing the pound to weaken dramatically.

The UK's Office of Budget Responsibility has warned that a 'no deal' Brexit could cause GDP to contract by 2% by the end of 2020.

However the outlook wasn't all bad: Capital Economics sees GDP rebounding next quarter, and thereby avoiding a recession (defined as two quarters of contraction). And with many of the car factories that shut down around the original Brexit deadline expected to soon be starting up again, that could deliver a boost to growth.

Unsurprisingly, the pound has continued its slide on the news.

By Zerohedge.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment