As the U.S. inflation rate continues to swell, the U.K. is experiencing a slightly more stable month during its 5 consecutive years of economic stagnation. However, industry experts have warned the Bank of England that 7.8m families will have zero savings by the end of 2023 due to higher mortgage rates and energy prices. Despite dodging a technical recession, U.K. GDP grew by 0.2% in Q2 of 2023, although this has not managed to drag the economy out of two-quarters of declining GDP.
U.K. families lose savings due to meagre GDP growth
Darren Morgan, Director of Economic Statistics at ONS, suggested that hot weather and an extra May bank holiday for the coronation of King Charles III helped to shake off further decline. Despite these factors, the cost-of-living crisis has been driven by the highest inflation in 4 decades, interest rate hikes on fixed-rate mortgages and a slow economic recovery from the Covid-19 pandemic.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
Industry experts observe that the U.K. economy has grown by only 0.4% since 2022 – the weakest growth in 65 years outside of a full recession. However, Conservative British Prime Minister Rishi Sunak celebrated the meagre growth on social media, noting that the rising figures suggest his plan for a national economic reboot is working.
Rachel Reeves: Source: The Guardian
On the other hand, cabinet ministers from the Labour Party are less impressed. Shadow Chancellor Rachel Reeves stated:
Economic mismanagement under the Conservatives has left Britain worse off and trapped in a low-growth, high-tax cycle.
