Recent figures show that the UK’s factory output has dropped again. This worrying trend suggests that the country’s manufacturing industry is now in recession, according to some sources.
A look across Europe shows that several other countries reported similar drops. What are the reasons behind this and what does it all mean?
What Do the Figures Show?
Worries that the British economy may be heading into recession were reduced slightly in July. An unexpected degree of growth during the month was reported by the Office for National Statistics.
While this isn’t a sign that the troubled times are all over, it is an indicator that things might not be quite as bleak as had been widely predicted.
The Overall Results and Their Importance
The UK’s economy grew by 0.3% in July. This was largely down to the strength of the country’s services sector. However, a small amount of growth was also seen elsewhere.
The recent arrival of negative interest rates in Europe has caused a major stir in the financial world. At the time of writing, Denmark, Switzerland and Sweden have slipped into negative rates. Across in Asia, Japan’s figure is also below zero.
Could the US be the next country to introduce negative interest rates? The debate has recently opened up again after President Donald Trump tweeted that the “boneheads” at the Federal Reserve should be cutting rates.
What Did Trump Say?
New figures that have come out from the British Chambers of Commerce (BCC) look at the UK’s expected economic growth in 2020. Overall, they suggest that growth will be slower than they had originally forecast.
In fact, the 2020 growth prediction has been reduced from 1% down to 0.8%. At the same time, they also lowered their expectations for 2019 from 1.3% to 1.2%.
What Factors Have Caused This?
Recently released figures show that the interest rates payable on British credit cards have reached the highest level in over a decade. In fact, consumer rates are now at their highest in 13 years.
At the time of the survey in September of this year, the average APR applicable to credit card purchases has risen to 24.7%. This compares to a figure from12 months ago of 23.4%.
The Reasons for This
One of the great success stories of the British economy in recent times has been the creation of many new jobs. Despite pressure on the economy and Brexit worries, it has been reported that the country has created more than 3 million jobs in the last 10 years.
Former Prime Minister David Cameron pointed out in a BBC interview that the UK created more new jobs between the financial crash and 2015 than the rest of the EU countries combined. The jobs market has continued to improve since then.
Figures from across Europe point to the region’s economy slowing down during September. Among the worrying indicators were the sharpest drop in manufacturing output and a fall in business executive optimism.
Fears of a no-deal Brexit are regarded as being part of the problem. However, there are other issues to take into account as well.
The Situation in Germany
The latest figures from the Office for National Statistics show that London has been growing at a rate that puts it clearly ahead of the rest of the country.
Details collated from 2012 up to the end of 2018 show that the UK capital has enjoyed a growth rate of 19% since then. This puts it ahead of the other parts of England and Wales that were covered in the report.
The Best and Worst Figures
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