Britain’s economy has dipped further in the second quarter, official data showed Friday, as the country now appears to be heading toward recession.
The country’s gross domestic product dropped 0.1 percent from April to June after enjoying a 0.8 percent increase in the first quarter, according to a statement by the Office for National Statistics.
The economy is expected to suffer a year-long recession by the end of 2022 as Britons endure the pangs of inflation at its highest level in decades.
According to ONS director of economic statistics Darren Morgan, “health was the biggest reason the economy contracted as both the COVID test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter.”
Finance minister Nadhim Zahawi has however promised to work with the Bank of England to get inflation under control and grow the economy.
Boris Johnson, who is expected to make way for the new Prime Minister next month will not make “major fiscal intervention” before leaving, according to his spokesman on Monday, amid calls for the incoming government to take over and fight back the inflation.
Foreign Secretary Truss and Sunak, two favourite candidates to replace Boris have been in a disagreement over how the crises could be properly addressed.
Truss’ plan is to create an emergency budget to lower taxes and to review the independent BoE approach toward fighting inflation.
Sunak, however, insists tax-financed with more borrowing would force the bank to increase rates, and opined on the importance of maintaining fiscal rigour and taming the price pressures first.
