The UK is officially in recession, and where our GDP growth figure normally sits between the US and Europe, we are currently below both and look as if we will be the first to enter recession and the last to exit. In Q3 this year the UK economy shrank by 0.2% compared to the Eurozone,which saw 0.2% growth and the US which saw 0.6% growth. The UK is expected to return to its post pandemic growth of 0.4% by the end of 2024. The figures particularly in Europe could change depending on the medium to long term effects of the war in Ukraine and the energy crisis.
At the CBI's annual conference, the message was that Brexit isn't working for businesses and the government is failing to deliver policies that will help growth recover. CBI director Tony Danker called for migration rules to be eased, so that companies can hire the staff they need. The free trade deals that were promised to better the economy and businesses are yet to be seen and last week former environment secretary George Eustice told Parliament the Australia deal was "not very good". "Overall, the truth of the matter is that the UK gave away far too much for far too little in return," he said.
The OECD (Organisation for Economic and co-operative development) thinks that we will not have a global recession, however central banks will need to keep rising rates to counter soaring inflation even as the economy slows and shrinks. They also said that the economic contraction in the UK is fundamentally down to the Pandemic rather than Brexit.
The UK and South Africa will join forces to drive economic growth and turbocharge infrastructure investment, Prime Minister Rishi Sunak has announced today at the start of President Ramaphosa’s formal State Visit. The next phase of the UK-South Africa Infrastructure Partnership is being launched today, supporting South Africa’s economic growth through major infrastructure developments and offering increased access to UK companies to projects worth up to £5.37bn over the next three years.
The pound and euro fell slightly against the dollar on Monday after Chinas latest Covid cases and lockdown, pushed investors to the dollar.
GBPUSD fell to around 1.1770 whilst EURUSD fell to 1.0260.
GBPUSD has recovered this morning and resides at 1.1860
GBPEUR resides at 1.1550
