The UK economy collapsed at a record rate

The UK economy collapsed at a record rate

FINANCE

2020-07-02 10:58:00

The UK financial system has shown a report decline for forty years, that hasn't happened since 1979. GDP fell by a record 2.2 percentage between January and March in 2020. This is reported by Reuters with reference to facts from the country's Office for National Statistics (ONS).

 

One reason is that households have decreased their spending. "Closing most companies meant that humans couldn't spend money even if they desired to," said Thomas Pugh, a British economist at Capital Economics. He added that the indicators could be able to reach pre-crisis levels only in the end of 2020 or beginning of 2021. The ONS estimates that the United Kingdom economic system collapsed via 20.4 percent in April as compared to March. Against this situation, the country's Prime Minister, Boris Johnson, announced on June 29 an increase in infrastructure spending. He promised to allocate 5 billion pounds ($6.13 billion) for hospital maintenance and road repairs in the first stage.

 

The Bank of England forecasts that the economy might also fall by 14 percent this year, with a purpose to be the worst overall performance in more than three centuries, that is, since 1706. The common revenue in the country is expected to fall by two percentage this year, and the unemployment rate will rise to nine percentage from the current four.

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