As of: February 15, 2024, 8:55 a.m
By: Marcel Reich
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For Prime Minister Rishi Sunak, the economic crisis is not good news.
© Victoria Jones/dpa
Britain is in recession as the general election approaches.
A difficult context for Prime Minister Rishi Sunak.
London – The British economy has slipped into recession.
The gross domestic product shrank by 0.3 percent from October to December compared to the previous quarter, as the ONS statistics office announced on Thursday in London.
Economists surveyed by the Reuters news agency had only expected a decline of 0.1 percent, after a decline of 0.1 percent in the previous quarter.
Two consecutive negative quarters are considered to be a recession.
In 2023 as a whole, there was still enough mini-growth of 0.1 percent.
For Prime Minister Rishi Sunak, the economic crisis is not good news.
After all, there are parliamentary elections this year.
According to surveys, the opposition Labor Party has a good chance of becoming head of government in the future.
German exports to Great Britain are growing
“There are signs that the UK economy is experiencing a turnaround,” said Finance Secretary Jeremy Hunt.
Wages are likely to rise faster than prices in the future.
Taxes on labor and companies must be reduced “to build a stronger economy.”
One reason for the lull is high inflation.
It dampens the purchasing power of consumers.
In order to reduce inflation, the Bank of England has sharply increased its interest rates.
This makes investments more expensive, for example in buildings and machines.
Despite the recession, German exports to the UK bucked the trend last year.
They increased by a good six percent to more than 78 billion euros, while exports fell by a total of 1.4 percent.
“German-British trade seems to have bottomed out,” said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura, in view of the years of decline as a result of Britain’s departure from the EU.
However, the German export record to Great Britain of 89 billion euros achieved in 2015 is still a long way off because Brexit is making trade more difficult.
With material from Reuters