2023-08-23 15:01:32
The British economy experienced its sharpest contraction in August since the beginning of 2021, when the country was in lockdown due to the Covid pandemic, as the impact of higher interest rates began to show, according to the UK Composite PMI.
This is the first slowdown in activity in the UK since January, according to this leading indicator released Wednesday by S&P Global.
“Companies are witnessing a decline in orders, which they attribute to the reluctance of their customers to enter into financial commitments in the face of rising interest rates and the increasing tightening on household income,” the report said.
The decline in activity was particularly noticeable in the industrial sector.
The Bank of England raised the main interest rate for the fourteenth time in early August to 5.25 percent, in an attempt to calm rising prices in the United Kingdom.
The rate of inflation in Britain declined in July, as expected, to reach its lowest annual rate since February 2022, despite the presence of more indicators that the Bank of England monitors and reflect pressure on the prices of commodities and services.
The Office for National Statistics said annual consumer price inflation slowed to 6.8 percent from 7.9 percent in June, in line with forecasts by the Bank of England and a Archyde.com poll of economists.
The inflation rate is moving further away from the 41-year high it reached in October at 11.1 percent, but still above the central bank’s target of 2 percent.
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