Economy

UK Economic Recovery Faces Great Challenges As It Runs Out of Steam

According to UK analysts, UK’s economic growth is expected to slow by 0.6% in the last quarter of 2015. However, they contrast the growth expectation to 2.6% GDP growth.

Chancellor George Osborne can only take credit for the strongest annual performance since the financial crisis, but he couldn’t take credit for helping the UK recover from its lacking economic performance.

 

The latest quarterly GDP, expected on Tuesday, may predict that the UK’s economic growth could only reach up to 0.6%. However, it also indicates that the economy has expanded by 2.6% for the entire year, which is its best performance since 2007.

 

According to Capital Economics Chief Samuel Tombs “GDP growth should have remained strong … but may have been less broad based. The output breakdown may show that the recovery has become entirely dependent on the services sector.”

 

Other reports show a slowdown at the end of 2014 for both construction and heavy industries. Meanwhile consumer spending has increased greatly, showing great sales increases in December. Drivers have contributed greatly with the lower prices of gas. Food shopping also gave the economy a good boost last Christmas.

 

Household spending will remain a crucial part of the UK economy. Households may get temporary relief from low inflation, rising employment and wages

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