The British economy shrank unexpectedly in the second quarter for the first time since 2012, dragged down by a slump in manufacturing just as Prime Minister Boris Johnson prepares to leave the EU with or without a divorce deal.
In the most startling economic warning sign since the 2016 Brexit referendum, GDP fell at a quarterly rate of 0.2 percent in the three months to June, below all forecasts in a Reuters poll that pointed to a flat reading.
Year-on-year economic growth slid to 1.2 percent from 1.8 percent in the first quarter, the British Office for National Statistics said, its weakest since the start of last year.
Photo: AFP
Annual growth in June alone was the weakest since August 2013 at 1 percent.
“The economy is stalling,” PwC senior economist Mike Jakeman said.
The Brexit crisis and the uncertain global outlook left the nation’s economy on a “knife-edge” for the third quarter, he added.
Many auto factories ramped up manufacturing at the start of the year and brought forward production breaks to prepare for Britain’s original Brexit date of March 29, but the divorce was delayed by then-British prime minister Theresa May.
“Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK’s original departure date from the EU,” ONS statistician Rob Kent Smith said.
The economic hazard warning lights are flashing, just as the trade dispute between the US and unsettles the world economy.
“This is a challenging period across the global economy, with growth slowing in many countries,” British Chancellor of the Exchequer Sajid Javid said.
“But the fundamentals of the British economy are strong — wages are growing, employment is at a record high and we’re forecast to grow faster than Germany, Italy and Japan this year,” he said.
Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain into a recession, roil financial markets and weaken London’s position as the pre-eminent international financial center.
The Bank of England last week predicted that growth would only stage a limited pick-up to a quarterly rate of 0.3 percent during the current quarter and that growth for the year as a whole would drop to 1.3 percent.
June manufacturing data was also unexpectedly poor and output for the quarter contracted at the fastest rate since early 2009, when Britain was mired in recession.
Private-sector business surveys have shown that the manufacturing and construction sectors both contracted last month, while larger services sector eked out only modest growth.
Britain’s economy has slowed since June 2016’s vote to leave the EU, with annual growth rates dropping from more than 2 percent before the referendum to 1.4 percent last year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last