UK Economy Shrinks Again – Is Britain Heading for Recession?
Here’s what’s happening in simple terms (based on Reuters reports):
📉 Bad news: Britain’s economy got smaller in May (-0.1%) after shrinking in April (-0.3%)
💷 Worse than expected: Experts thought it would grow 0.1% (Reuters poll)
🏦 Bank of England may cut rates next month to help
Why This Matters:
1️⃣ Two months of decline often signals recession ahead
2️⃣ New government struggling to “kickstart growth” (their key promise)
3️⃣ US trade wars hurting – UK exports to America falling fast
Key Problems:
🔧 Factories & construction doing poorly
💼 Services sector barely growing
💰 Possible tax hikes coming
What Experts Say (via Reuters):
➡️ “An August interest rate cut now looks inevitable” – ICAEW economist
➡️ “Growth plan derailed by shocks” – S&P Global analyst
Silver Lining?
Some hope spending may improve later this year if:
✅ Wages keep rising
✅ Interest rates fall
Quote from Finance Minister:
“While disappointing, I’m determined to kickstart growth” – Rachel Reeves
What Happens Next?
- Will June data avoid a full recession?
- How will the new government respond?
- Will the Bank of England cut rates?
Source: Reuters – For full details