UK may be entering full-blown recession: budget watchdog

 

FILE PHOTO: People walk through the Canary Wharf financial district of London, Britain, December 7, 2018. REUTERS/Simon Dawson/File Photo

 

LONDON (Reuters) - Britain might be entering a full-blown recession and a no-deal Brexit could more than double the country’s budget deficit next year, the watchdog for public finances said on Thursday.

 

The Office for Budget Responsibility said the world’s fifth-biggest economy appeared to have flat-lined or possibly contracted in the second quarter, some of which was probably “pay-back” after Brexit-related stock building in early 2019.

 

“But surveys were particularly weak in June, suggesting that the pace of growth is likely to remain weak. This raises the risk that the economy may be entering a full-blown recession,” it said in a report on the outlook for the public finances.

 

A no-deal Brexit would hurt confidence and deter investment and lead to higher trade barriers with the European Union, pushing down the value of the pound and causing the economy to contract by 2% by the end of 2020, the OBR said, referring to forecasts by the International Monetary Fund.

 

A no-deal Brexit - something the two contenders seeking to be Britain’s next prime minister say they are prepared to do if necessary - could add 30 billion pounds ($37.4 billion) a year to public borrowing by the 2020/21 financial year, the OBR said.

 

The OBR said the spending and tax cut promises made by Boris Johnson and Jeremy Hunt, one of whom is due to become prime minister next week, would put a strain on the budget.

 

“The spending control framework seems to be under pressure, with major announcements being made outside fiscal events, and the Conservative leadership making pledges that would prove expensive if pursued,” it said.

 

-- © Copyright Reuters 2019-07-18

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Thanks to the Brexit fools that is. As I said before, the UK will soon be vying with Greece as the poor man of Europe.

Great news they are finally going to get what they voted for???? 

Might.

 

Could.

 

Seems to be.

 

Brexit.

 

And the punch line? Reuters.

 

Jog on.

 

Project Fear, still trying.

Amazed the UK economy is the world's 5th largest.

The other 26 odd EU countries economies must be shit.

They must be pooping themselves as a no-deal Brexit approaches.

 

How will they cope without the UK paying for them all?

Now what happens if the sterling tanks, what will be the value against the Baht???  Not looking good for the British pound especially with Brexit.

They're trying very hard aren't they, it's about time they realised we are leaving this failed project, the sooner the better.

1 hour ago, geoffbezoz said:

Thanks to the Brexit fools that is. As I said before, the UK will soon be vying with Greece as the poor man of Europe.

Yes, Brexit will inevitably be bad for UK economics. But no, it won't reduce the UK to Greece. On the one hand it's a universally observed rule of economics that the geographically closer countries are to each other the more trade they do with each other.. So the cries of we'll find new markets to replace the ones we've lost are nuts. On the other hand, the UK will be trading on the same terms with the EU as the USA now does. And that's a huge volume of trade. And that's because most tariffs are very low or nonexistent. And in the case of integrated supply lines between the rest of the EU and the UK, that will hurt manufacturing. But most of the UK economy is in services. So that impact is limited.

2 hours ago, mike787 said:

Now what happens if the sterling tanks, what will be the value against the Baht???  Not looking good for the British pound especially with Brexit.

For someone who can’t afford to be in Thailand the prospect of others being forced to leave by a collapsed pound might be something to make themselves feel better.

I care not a jot.

 

My wad is nestling in the Isle of Man beyond the greedy buggers clutches with an option to shift it to Singapore if any dirty deeds look likely.

More project Fear from those with vested interests to Remain. Lots of ‘could’ ‘would’ ‘might’ ‘maybe’.
It’s up to business and the govt to prepare properly to prevent all the dire predictions. Have they never heard of Risk Management?


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15 minutes ago, Loiner said:

More project Fear from those with vested interests to Remain. Lots of ‘could’ ‘would’ ‘might’ ‘maybe’.
It’s up to business and the govt to prepare properly to prevent all the dire predictions. Have they never heard of Risk Management?


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Have you never heard of an Act of God? Some things you just can't adequately prepare for unless you want to defy economic history.

4 hours ago, BritManToo said:

Project Fear, still trying.

Amazed the UK economy is the world's 5th largest.

The other 26 odd EU countries economies must be shit.

They must be pooping themselves as a no-deal Brexit approaches.

 

How will they cope without the UK paying for them all?

 

1) UK _was_ the 5th largest economy while it was still part, and thanks to being part, of the EU.

2) the EU globally is/was the 2nd largest.

3) btw Germany and France are 4th/6th, not exactly "shit"

3) perhaps you should consider that the UK was not only paying, but also receiving princely from the EU

 

This said, I don't know/care about Project Fear, I just hope the dear UK friends get soon what they voted for, then have been dragging their feet to delay, and bothered the rest of the EU for far too long about.

A post containing profanity has been removed.

 

43 minutes ago, arithai12 said:

 

1) UK _was_ the 5th largest economy while it was still part, and thanks to being part, of the EU.

2) the EU globally is/was the 2nd largest.

3) btw Germany and France are 4th/6th, not exactly "shit"

3) perhaps you should consider that the UK was not only paying, but also receiving princely from the EU

 

This said, I don't know/care about Project Fear, I just hope the dear UK friends get soon what they voted for, then have been dragging their feet to delay, and bothered the rest of the EU for far too long about.

The UK is one of the biggest net contributors to the EU, where do you think they get their money from?

The UK economy is equivalent to around 19 of the smaller economies.

What difference does the size of the german and french economies make, we're talking about the UK.

I just love that point 3 of yours, had same with my daughter, she'd ask for £200 quid and give me a tenner back, that's how stupid your argument is.

4 hours ago, BritManToo said:

Project Fear, still trying.

Amazed the UK economy is the world's 5th largest.

The other 26 odd EU countries economies must be shit.

They must be pooping themselves as a no-deal Brexit approaches.

 

How will they cope without the UK paying for them all?

The UK GDP has fallen back somewhat in the last couple of years as the GDP had depreciated. The UK is now the world's 7th largest economy (http://worldpopulationreview.com/countries/countries-by-gdp/).

In terms of per capita GDP (which is what is important because in translates in living standards) the UK was 26th in 2018 - somewhat below other north European/Scandinavian countries inc. Netherlands, Belgium, Germany etc.

 

No doubt there will be a lot of haggling and horse-trading to make up the EU contributions when the UK leaves, but I'm sure none of the other countries will be 'pooping themselves'.

Anyway, the real shitshow will start in the UK after Brexit.  Immigration is unlikely to fall but rather switch to non-EU countries, a weak pound will lead to higher inflation, declining living standards and more costly package holidays (none of which will play well with core Brexit voters) - so expect plenty of disappointment and finger-pointing. 

5 hours ago, snoop1130 said:

UK may be entering full-blown recession

Don't worry, the USA is right behind you!  We'll go down together on this sinking ship.

It does make me laugh. Whenever there's any sign of us actually managing to leave the clutches of the EU project masters, out comes another 'independent' report predicting doom and gloom. With Boris and Hunt now both talking tough, it was inevitable this 'news' would be all over the media today. 

 

It's a completely one sided view of the situation, with no provision for the actions our sovereign government will take to ensure we remain competitive, and to protect our economy. 

 

What annoys me the most is the way they trot out this garbage as though it's fact, when they know full well the world economies have so many moving parts there is no way of predicting GDP growth etc. beyond next week! 

 

Have you never heard of an Act of God? Some things you just can't adequately prepare for unless you want to defy economic history.

No act of god here. It’s all entirely man made, so preventable and avoidable. Of course there will always be the EU and Remainers trying their best to throw spanner’s in the works. Economic subversion and sabotage are not god like acts.

All these remainers always snap their rabid teeth around a story like this when there's actually more to be concerned about within the EU. From today:

 

https://www.cnbc.com/2019/07/18/european-central-bank-set-for-rate-cut-september-economists.html

 

QE til we die

QE til we die

We love printing funny money

QE til we die.

Will there be even more pub fights? I hope the cctv footage gets to mass media.

Project Fear, still trying.
Amazed the UK economy is the world's 5th largest.
The other 26 odd EU countries economies must be shit.
They must be pooping themselves as a no-deal Brexit approaches.
 
How will they cope without the UK paying for them all?

Wow what thorough economists you are.


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10 hours ago, bristolboy said:

Yes, Brexit will inevitably be bad for UK economics. But no, it won't reduce the UK to Greece. On the one hand it's a universally observed rule of economics that the geographically closer countries are to each other the more trade they do with each other.. So the cries of we'll find new markets to replace the ones we've lost are nuts. On the other hand, the UK will be trading on the same terms with the EU as the USA now does. And that's a huge volume of trade. And that's because most tariffs are very low or nonexistent. And in the case of integrated supply lines between the rest of the EU and the UK, that will hurt manufacturing. But most of the UK economy is in services. So that impact is limited.

I appreciated your optimism and for the sake of the future for the next generations I would hope it is true.  Unfortunately some of the worlds finest economists do not hold your view.

Any prudent investor would be a tad apprehensive about investing in UK. "Money walks and bullsh*t talks" seems to be current situation

Have any of those claiming this is just ‘project fear’ got any alternative economic data and forecasts they can refer us to that demonstrates the UK economy is not faltering?

8 hours ago, Traubert said:

I care not a jot.

 

My wad is nestling in the Isle of Man beyond the greedy buggers clutches with an option to shift it to Singapore if any dirty deeds look likely.

I hope you checked your fees and the ‘repatriation costs’ of life takes a turn that compels you to return to Blighty.

Thanks Boris and co.

You have done a great job.

Personal gain and political right wing ideology trumps the national interest every time.

Not sure why the UK is being singled out except by Brexit scaremongers. It's obvious that many Western economies have reached the point in the business cycle where there's an economic downturn. Anyone who doesn't know this isn't following the financial press that covers global trends rather than parochial matters

Project fear phase 2. There's nothing like a doom and gloom story to make a remainer happy, they don't want the country to do well, they just want the opportunity to say that 'we told you so'

 

The far greater fear now is a " No Deal Remain ".