Output improves to 20-month high and job losses slow but global problems continue to restrict foreign orders
A jump in domestic orders helped pull UK factories out of almost two years of contraction last month, according to a leading business survey.
Output from the manufacturing sector improved to a 20-month high in March, marking the end of a period of shrinking activity that started in July 2022.
Continue reading...Latest estimate from ONS says GDP declined by 0.3% in final quarter of 2023
Official figures have confirmed that the UK economy went into recession at the end of last year, after the latest estimate found it contracted in the last two quarters of 2023.
In a blow to the government’s economic standing, the Office for National Statistics (ONS) said the economy, as measured by gross domestic product, shrank by 0.3% in the last three months of the year, unrevised from an earlier estimate.
Continue reading...Governments try to generate a feelgood factor before an election. The UK has the opposite: a feel-bad factor
In the end it wasn’t really that close. The UK economy is now technically in recession after contracting by 0.3% in the final three months of 2023.
The official data brings to an end a miserable year for the UK. Growth in 2023 as a whole was just 0.1% – the weakest performance outside the Covid pandemic year of 2020 since 2009.
Continue reading...25% jump in firms facing ‘critical’ financial distress, with property and construction sectors featuring heavily, says Begbies Traynor
More than 47,000 UK companies are on the brink of collapse after a 25% jump in the number of businesses facing “critical” financial distress in the final three months of 2023, according to a report.
It marks the second consecutive quarter-on-quarter period when critical financial distress has risen by a 25%, the latest “Red Flag” report by insolvency specialists Begbies Traynor found.
Construction (7,849)
Support services (7,096)
Real estate & property services (6,228)
Professional services (4,347)
General retailers (3,133)
Telecoms & IT (2,830)
Health & education (2,719)
Media (1,828)
Financial services (1,373)
Food & drug retailers (1,343)
Continue reading...Surprise fall in December sales damages chancellor’s claims that UK economy is on right track
The UK economy was probably in recession during the second half of 2023 if the latest retail sales figures are anything to go by.
A surprise 3.2% slump in the level of sales in Great Britain during December appears to show the cost of living crisis was continuing to hurt household finances despite a rise in wages that gave many consumers a bit more spending power.
Continue reading...Fear adds to Russia-Ukraine conflict risk and increases ‘probability of European and of US recession’
A global recession could be triggered by the conflict in the Middle East as the humanitarian crisis compounds the challenges facing an already precarious world economy, two of Wall Street’s biggest names warned this weekend.
Larry Fink, chief executive of the world’s largest asset manager, BlackRock, said a combination of the Hamas atrocities of 7 October, Israel’s resultant attack on Gaza and Russia’s invasion of Ukraine last year had pushed the world “almost to a whole new future”.
Continue reading...Rise to 5.25% comes as no surprise but Bank of England’s language will frighten many
If it isn’t hurting it isn’t working. That was the message from John Major, then chancellor, in 1989 during a previous period when interest rates were being used to combat high inflation. And it was the message rammed home by the Bank of England on Thursday.
Any hard-pressed households or struggling business looking for comfort from Threadneedle Street would have been disappointed by news that the pain will continue and is likely to intensify. Interest rates may not yet have peaked.
Continue reading...Households and firms can expect more financial pain despite Britain dodging technical recession, says KPMG
Britain will be left with deep scars from the pandemic despite narrowly escaping a second recession within three years and growing signs of an economic pick up, according to new forecasts.
A new report by the accountancy firm KPMG has found that the economy has enjoyed a better start to the year than it had thought, and is now expected to grow by 0.3% this year, compared with its previous prediction of an uplift of just 0.1%.
Continue reading...High inflation likely to push interest rates above 5% and force up mortgage and loan payments just ahead of election
Rishi Sunak has been warned the UK economy could be in recession next year as stubbornly high inflation pushes interest rates to more than 5% before the next general election.
Setting the stage for a further rise in borrowing costs on mortgages and loans for millions of households, economists predicted the Bank of England could be forced to drive Britain’s economy into a recession to tame inflation.
Continue reading...Chancellor also expected to tell markets that government spending will remain within strict limits
Jeremy Hunt will defend the government’s vision for Britain’s economic future in a speech to City executives in London on Friday when he will lay out plans for investment and growth.
The chancellor will say he wants to promote policies that allow the private sector to re-tool the UK’s industrial base and re-skill the workforce to generate strong growth over the next decade.
Continue reading...Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession
Mortgage payers are braced for higher borrowing costs, after the Bank of England pushed up its base rate by 0.5 percentage points to 3.5% despite saying inflation has peaked and Britain is about to enter “a prolonged recession”.
The Bank hiked interest rates on Thursday for the ninth time in a year, to the highest level in 14 years, but told borrowers to prepare for fresh increases in the new year.
Continue reading...Comparisons with 1979 are misleading – strikes over pay now are smaller in scale and focus, and stoked by inflation
Britain is facing a winter of strikes, as industrial action on the railways spreads to the health service and other key sectors of the economy. Such is the wave of discontent that more than 1m working days could be lost to disputes in December, the most since 1989, during Margaret Thatcher’s final years in power.
With inflation at the highest rate in 41 years amid the cost of living crisis, it’s not difficult to see why workers are pushing for better pay. Coming after the worst decade for average wage growth since the Napoleonic wars, including deep real-terms pay cuts for many in the public sector, it’s even less surprising still.
Continue reading...Closures rise by 60% in past year, including 453 in most recent quarter, says advisory firm Mazars
UK restaurants are going bust at a faster rate than during the Covid crisis owing to a “toxic mix” of surging energy costs, staff shortages and falling bookings.
Closures in the sector rose by 60%, with 1,567 insolvencies over 2021-22, up from 984 during 2020-21, according to a study by the advisory firm Mazars. The figure includes 453 over the past three months, up from 395 in the previous quarter.
Continue reading...Traditional TV shunned in favour of digital media and last-minute promotional campaigns
More than two-thirds of the UK’s biggest advertisers intend to cut back spending on traditional TV next year, as the recession fuels a shift to digital media and last-minute bursts of promotion.
A survey of 59 UK advertisers has found that 67% will make the deepest budget cuts to ads on broadcast TV, according to the Incorporated Society of British Advertisers (ISBA) and the media investment analysts Ebiquity.
Continue reading...Chefs are hoping the concept will tempt diners to spend a little more and fight the cost-of-living crisis
Linden Stores, in the Cheshire village of Audlem, has started a whole sharing menu of modern British food, with two people sharing seven dishes including charred pepper and Cornish Quartz cheddar croquettes, hake wrapped in wild boar pancetta and chocolate and peanut butter tart.
Laura Christie and her partner, Chris Boustead, relocated the restaurant to the village from London in 2020. She has been surprised by the reaction.
Continue reading...Threadneedle Street makes clear on eve of tax-cutting mini-budget that plans risk triggering more rate rises
The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher after Friday’s tax-cutting mini-budget.
On the eve of a major package of support from the chancellor designed to break what he called the economy’s “cycle of stagnation”, Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.
Continue reading...Monthly look finds deepening pessimism about personal finances and prospects for the economy
Consumer confidence in the UK is weaker than during the four major recessions of the past half century as rapidly rising inflation saps morale.
Although the UK is technically yet to enter recession, the latest barometer of sentiment from the data company GfK found the public gloomier than at any time since the survey began in January 1974.
Continue reading...Cost of living crisis has meant the average amount given to children has fallen to lowest level since 2001
Children’s piggy banks are paying a high price for the cost of living crisis after almost a third of parents cut back on pocket money during the last year.
The average amount that is going into the pockets of under-16s each week has dropped by 23% to £4.99 this year from £6.48 in 2021, according to research from the lender Halifax – the lowest amount since 2001.
Continue reading...Base rate raised by 0.5 percentage points to 1.75%, as Bank says inflation will hit 13% in October
Vladimir Putin’s invasion of Ukraine has left Britain on course for a recession lasting more than a year and inflation above 13%, the Bank of England has warned as it raised interest rates for a sixth successive time.
Threadneedle Street said it had no choice but to increase borrowing costs by 0.5 percentage points to 1.75%, blaming Russia for cost of living pressures not seen in more than four decades and a 5% drop in living standards straddling this year and next – the biggest since records began in the 1960s.
Continue reading...Euro slumps to 20-year low against US dollar as jump in natural gas prices intensifies economic strain
Rising worries about a European recession hit stock markets on Tuesday as the euro slumped to a two-decade low and the pound fell to its lowest since the start of the pandemic.
Shares tumbled in London and across Europe as a jump in natural gas prices intensified the strain on the European economy.
Continue reading...