New Figures Show Stagnant UK Economy Lagging Behind EU

credit: euronews

UK (Parliament Politic Magazine) – New figures have revealed that Britain’s economy is experiencing a stagnant phase, with post-Brexit trade and vital sectors performing poorly. The Office for National Statistics (ONS) has reported that there has been no growth in the economy for the past three months, with the production sector being the most affected.

In May, the monthly GDP growth, which measures the total value of goods and services produced in a country, declined by 0.1% following a brief increase of 0.2% in April. Unfortunately, Britain’s economic recovery since the COVID pandemic has been slower compared to most other advanced economies. 

Germany, which has also been hit by recession, is the only country faring as poorly as Britain this year. It is evident that the current state of Britain’s economy is a cause for concern.

Underperforming Sectors Of The UK Major Reason Behind The Downfall 

The lack of growth and the underperformance of key sectors, coupled with the challenges posed by Brexit, have contributed to this flatlining effect. The decline in production further exacerbates the situation, highlighting the need for immediate action to stimulate economic activity.

The Office for National Statistics report serves as a wake-up call for policymakers and business leaders alike. It emphasizes the urgency of implementing effective strategies to revive the economy and restore confidence in post-Brexit trade.

 It is crucial to address the underlying issues that have hindered Britain’s economic progress and to explore innovative solutions to propel growth. The current state of Britain’s economy demands immediate attention and concerted efforts to overcome the challenges it faces.

 By implementing effective measures and fostering a conducive environment for growth, Britain can navigate through these turbulent times and emerge stronger and more resilient than ever before.

EU’s Economy Expected To Grow Faster As Compared To Europe

In comparison, the European Union’s economy is projected to experience faster growth than previously anticipated this year and next, with member states expected to grow by an average of 1.0% in 2023, as reported by the European Commission.

Surpassing economists’ expectations, Britain’s economic figures were more favorable. However, this may exert additional pressure on Rishi Sunak’s Conservative government, as the Prime Minister had identified economic growth as one of his five key commitments at the beginning of the year.

In May, all sectors of the UK economy, except for services, witnessed contraction. Factory output experienced the largest decline of 0.6%, construction declined by 0.2%, and the services sector remained stagnant with no change from the previous month, according to the Office for National Statistics (ONS).

Persistently high inflation has adversely affected British households and certain businesses. Despite predictions of a decline, inflation remained at 8.7% in May. The role of Brexit in shaping Britain’s economic fortunes is a subject of dispute among economists, with some highlighting the impact of COVID and the Ukraine war.

According to the Office for National Statistics, a public holiday commemorating the King’s coronation has been identified as a contributing factor to the decline in manufacturing and construction output.

Read More: UK Proposes To Scrap EU Restrictions on Short Selling of Sovereign Bonds

Weak Export Performance Of A Major Gap Between EU UK Economies

A Resolution Foundation economist has highlighted that the latest data from the Office for National Statistics (ONS) reveals a concerning decline in the UK’s export performance within key manufacturing sectors. Specifically, exports to the European Union (EU) experienced a significant drop of 6.8%, while the rest of the world saw a comparatively smaller decline of 2.1%.

The ONS report also attributes the struggling economy to strikes occurring in the public sector and various industries, with industrial action within the railway sector having a particularly detrimental impact. These disruptions have had a severe effect on the GDP of the food and beverage services, causing a significant decline in this sub-category.

On a more positive note, the report highlights that the coronation bank holiday had a beneficial effect on the arts and entertainment sector. This industry experienced notable growth, second only to human health and social work activities, which played a crucial role in preventing further economic decline.

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Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.