The U.K. economy marks growth month by month, but the ONS data tells a different story – “recession is still inexorable.”

The positive indicators of the Uk’s economy are not enough to stop the upcoming recession. The Bank of England warns the U.K. on its economy and will experience at least a four-quarter recession, the longest-ever downturn in its history. The recession may be delayed but cannot be precluded.

The economy in the Uk grew 0.1% in November, according to data published by the Office of National Statistics. However, the country would likely face a recession in the fourth quarter. In 2022, the U.K.’s economy suffered a 0.3% contraction despite a 0.5% monthly expansion in October and 0.1% in November. The data indicates a technical recession soon in the U.K.

Consumer services grew by 0.4% in November 2022. The ONS, in its report, said that the largest contribution to the economic growth came from food and beverage services in the month when the FIFA World Cup started.

“Today’s data can hardly disguise the likelihood that whilst recessionary conditions may be shallow, an economic contraction is underway,” said Jeremy Batstone-Carr, European strategist at Raymond James.

He added, “What’s more, the effects of the Bank’s monetary tightening are still to feed the economy fully. With the corporation tax increase to 25% and the expiration of the tax reduction on new investments, the economy only stands to contract further.”

“Policymakers are keen to see heat taken out the economy because this will help to bring inflation down, which will eventually end the continuous rise in interest rates,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“With the spending boost from the World Cup and Christmas now behind us, industrial action spreading, and significant tax rises due to hit consumer pay packets in April, the BoE’s forecast of a recession looks set to be delayed rather than avoided,” said Stuart Cole, a head macroeconomist at Equiti Capital, told CNBC via email Friday.

- Published By Team Timeswire

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