Britain predicted the worst recession among the G7 countries in 2023

Photo: © REUTERS/Henry Nicholls

Britain will face the worst recession in the economy compared to other G7 states this year. This is reported by the Financial Times with reference to economists.

The inflation shock caused by the pandemic and the special operation of the Russian Federation in Ukraine will last longer in the United Kingdom than in other states, experts suggest. According to them, because of this, the Bank of England will be forced to maintain high interest rates, and the British Cabinet – to pursue a tighter fiscal policy.

Thus, it is assumed that in 2023 Britain will face one of the worst recessions and the weakest recovery in the G7, as households “pay a high price” for the political miscalculations of the country’s Cabinet.

According to economists, the British GDP, which is already shrinking, will continue to fall this year. According to Consensus Economics, the United Kingdom’s GDP will fall by 1 percent. In parallel with this, US GDP will grow by 0.25 percent.

It is assumed that this year’s recession in the UK will be felt much worse than the economic consequences of the pandemic.

The experts added that the current year for British consumers will be “heavy, gloomy, harsh, miserable and terrible.”

The Bank of England raised the base interest rate by 50 basis points – from 3 to 3.5 percent. The regulator also announced the beginning of a recession in the economy, which is predicted to last the entire current year and the first half of the next. Annual inflation in Britain was 10.7 percent in November last year, after hitting a 41-year high of 11.1 percent in October. That month, the Bank of England carried out the largest increase in the key interest rate in 33 years, raising it by 75 basis points – from 2.25 to 3 percent per annum. This year, the IMF predicts a recession in half of the EU countries.

The European Union’s rejection of Russian energy resources is part of large-scale anti-Russian sanctions adopted by Western countries after the start of the Russian special operation to protect Donbass. However, the sanctions have done more economic harm to Europe itself than to Russia. For example, the International Energy Agency has warned of an unprecedented energy crisis in Europe.

Europeans are coming out to protest against the uncontrolled rise in prices for food, essential goods and housing and communal services. In Germany, they have already begun to prepare for regular power outages.

France is running out of gas at gas stations due to the energy crisis. The British refuse heating, so as not to get into debt. In Berlin, due to fuel shortages, residents have cut down almost all the trees in the Tiergarten central park. Polish Prime Minister Mateusz Morawiecki called on the country’s population to prepare for a difficult winter.

Source: Ren.tv

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