The UK is likely to slip into recession soon. This is because the UK economy contracted unexpectedly in August. Germany is also expecting contractions, but not until next year.
A country enters a recession when it registers economic contraction for two consecutive quarters. In England it is almost time. In August and the months before that, the economy contracted. To avoid a recession, the UK economy must grow at least 1.1 percent last month.
Figures for September are not yet available, but last month’s growth looks unlikely. Due to the death of Queen Elizabeth, England gets an extra day off. In addition, many households may be keeping their wallets tight due to rising inflation. That drives shrinkage.
If the UK does fall into recession, it will be the first major European economy to experience it. More may follow later. For example, Germany’s economy minister Robert Habeck said on Wednesday that its eastern neighbor’s economy, Europe’s largest, would likely shrink by 0.4 percent next year.
According to him, this was due to Russia’s invasion of Ukraine. This means, among other things, more expensive energy, which also makes other goods and services more expensive. As a result, households can buy less with their money.
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