News

UK to enter recession in Q4 amid energy crisis: Goldman

  • Goldman Sachs predicts a significant decrease in British economic growth.
  • The United Kingdom (UK) experienced a record high inflation in June.
  • The main drivers of inflation in the UK are energy prices.

Goldman Sachs economists are forecasting a severe decline in British growth later this year, attributing the problem to inflation which has reduced the amount of disposable income for families. The investment bank has downgraded its growth forecast for the UK economy from 1.4% to 0.6%.

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With each passing day, the macro-world economy gets worse. Consumers’ purchasing power has decreased, while producers have been tolerating low demand. The combination of the two is a recipe for disaster, and it seems that Goldman Sachs has lost confidence in the UK economy’s ability to rebound.

According to recent news, The United Kingdom (UK) experienced a record high inflation in June. The consumer price index rose to 10.1 percent from 9.4%, according to the Office for National Statistics. notably, the figure was greater than expected, with a result of 9.8%. This was the UK’s highest inflation rate in nearly 40 years.

The main drivers of inflation in the UK are energy prices, which have risen sharply in recent months. The cost of petrol has increased by 20% in the past year, while the price of electricity has gone up by 10%. These rising costs have put a squeeze on consumers’ budgets, and it is now starting to show in the economy.

According to the investment bank, the recession prospects are unlikely to deter the Bank of England from further tightening monetary policy. It expects a 50 basis-point rate increase in September and “upside risks” to its call for quarter-point increases in November and December.

Godfrey Mwirigi

Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

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