2023-06-24 07:03:02
Private sector growth in the United Kingdom has slowed to its lowest levels in 3 months, as rising interest rates and high inflation fueled by soaring food prices exacerbate the cost of living crisis, data released Friday showed.
This comes with the British government announcing measures to help mortgage holders after their high costs due to the increase in interest rates, such as increasing the non-payment period and allowing customers to pay debt service only for 6 months or extending the mortgage period to reduce monthly payments.
The figures released showed the economic difficulties facing Britain, as the purchasing managers’ index (BMI) of the “Standard & Poor’s” group fell to 52.8 in June, after it was 54 in May, and a number above 50 indicates growth. activity, while a lower number indicates a decline.
“The June PMI survey shows that the UK economy has lost momentum again after a slight increase in growth during the spring and looks set to weaken further in the coming months,” Chris Williamson, senior economist at S&P Global Market Intelligence, said in a statement. .
He pointed out that “consumer spending on services, which was a main driver of growth in the spring, is now showing signs of faltering,” noting that “this came after the rise in interest rates, the cost of living and pessimism about future expectations, which nullifies the effects of the short boost to spending.”
Official data this week showed that the annual inflation rate in the United Kingdom reached 8.7 percent in May, unchanged from April, prompting the Bank of England on Thursday to announce a higher-than-expected rate hike. by 5%, a sharp increase from 0.1% at the end of 2021).
Economists expect rates to reach 6% this year, which could lead the United Kingdom into recession, similar to the eurozone.
And a number of economists in Britain said that it is “inevitable now that the British economy will enter a state of recession due to the Bank of England’s inability to curb the growing inflation,” and they expected another rise in interest rates.
A few days ago, the Scottish newspaper “The National” reported in a report that “inflation in the United Kingdom will be one of the highest rates of any developed economy,” quoting the Organization for Economic Co-operation and Development.
And the International Monetary Fund had warned last April that the British economy may contract this year and will be at the end of the ranking of the Group of Seven countries, at a time when a new outbreak of financial turmoil threatens the slowing global recovery.
Britain
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