The BBC reports UK Economy Shrinks for the First Time Since 2012.
Sajid Javid , the chancellor, told the BBC that he does not expect the UK to slide into recession but I strongly disagree.
The ONS [Office of National Statistics] said GDP had been “particularly volatile” so far this year because of the changes to activity sparked by the original Brexit date of 29 March.
The statistics body said its latest figures showed that those increased stockpiles had been partly run down in the second quarter and that a number of car manufacturers had brought forward their annual shutdowns to April as part of contingency planning, which also hit growth.
Mr Kent-Smith said: “Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK’s original departure date from the EU.”
He added that “the often-dominant service sector delivered virtually no growth at all”.
Mr Javid told the BBC: “I am not expecting a recession at all. And in fact, don’t take my word for it. There’s not a single leading forecaster out there that is expecting a recession, the independent Bank of England is not expecting a recession. And that’s because they know that the fundamentals remain strong.”
UK vs Germany, Italy, France Spain
Germany, the Eurozone’s largest economy is also in contraction.
Italy, the Eurozone’s third largest economy is flirting with contraction.
Brexit Will Take a Toll
It’s debatable which economies will suffer more from No Deal, but they all will suffer substantially. I propose the EU will suffer more, as noted in Eight Reasons the EU Will Suffer Far More Than UK in Brexit.
What’s not debatable is the idea that Brexit will take a significant short-term toll on both the UK and the Eurozone economies.
Manufacturing Recession Has Arrived
Meanwhile, thanks partially to Trump’s trade wars, thanks partially to inept policy by central banks, and thanks partially to simple economic exhaustion, a Global Manufacturing Recession Started.
Brink of a Global Recession
A tipping point has been breached. A global recession awaits. The US will not be immune.
Those who expect a warning period need to think again. For discussion, please see Manufacturing Recessions vs Real Recessions: How Much Lead Time Do You Expect?
Mike “Mish” shedlock