As inflation soars, families are pushed to curtail expenditures.
The economy of the UK is contracting as a recession approaches.
Because inflation is so high right now, households are being forced to cut back on their spending.
According to statistics that were made public by the Office for National Statistics on Friday, the United Kingdom’s economy saw a contraction in the three months leading up to June, falling by 0.1% as increasing inflation hindered spending activity.
The loss was lower than the contraction of 0.3% that was forecast by analysts, and it came after a drop of 0.8% in the first quarter of 2022. Following a rise of 0.4% in May, monthly GDP estimates showed a drop of 0.6% in June. This comes after estimates showed a gain of 0.4% in May.
The most recent data indicated that consumer-facing sectors of the economy were showing signs of developing weakness. This comes at a time when Brits are dealing with inflation that has reached its highest level in nearly four decades. The current rate of inflation, which reached 9.4% in July, is expected to keep climbing through the fall.
In the second quarter, the ONS found that household consumption had decreased by 0.2%, but that this was more than compensated for by a positive contribution from net trade.
The Bank of England issued a warning the week before last that it anticipates the economy of the United Kingdom will enter its deepest recession later this year since the global financial crisis of 2008. In the meantime, it is anticipated that inflation will reach a high of more than 13% in October.
Suren Thiru, economics director of the Institute of Chartered Accountants in England and Wales, told Reuters that the economy of the United Kingdom is getting closer and closer to entering a recession, and that the worst is still to come.
