UK Economic Activity GDP Down for 2nd Consecutive Month

The Office for National Statistics (ONS) has today confirmed that UK gross domestic product (GDP), our total economic output for the month of October was down 0.3%.  This is the second month in a row that GDP has fallen.  In September, GDP fell by 0.1%.

The impact of higher interest rates in UK and a global slowdown in business investment is slowing economies not just in the UK but around the World.  In addition, President Elect Donald Trump has already threatened the world with import tariffs to protect the US econoimy, again affecting how international businesses plan that then trickles into all economies.

Comment

We have long suggested that if the economy follows its normal economic cycle, we will move into recession with 12-18 months.  Tariffs will not help this.

Higher interest rates in the UK and the US, has also contributed to econoimic slowdown to reduce GDp and therefore, stubborn inflation should fall giving room for central banks to cut interest rates.  The European Central Bank (ECB) is due to make a decision on interest rates tomorrow with both the US Federal Reserve rate decsion and the UK’s ONS’s inflation figures due on Wednesday and the Bank of England rate decision next Thursday.  We expect rates to be cut on these new GDP figures.