Fri, 9th Aug 2019
The most recent GPD figures show that the UK’s economy has shrunk by 0.2 percent during the second quarter. This is the first time in seven years that GDP has decreased.
The start-of-year figures were boosted by companies stockpiling in anticipation of a potential no-deal Brexit, but in the second quarter this rush was over, and a combination of poor weather and planned production pauses led to the market contraction.
The GDP is down by 0.2 percent on the first-quarter, which is the worst performance for the UK since the height of the financial crisis in 2009. The drop is more marked when it is considered that in the first quarter of the year the GDP was showing growth of 0.5 percent.
Brexit fears are still mounting, with supermarket bosses wondering how they will manage to keep food supplies moving in the event of a disorderly Brexit. Competition law forbids supermarket managers from discussing pricing and supply at this time, but the Food and Drinks Federation is asking the government to waive some of those laws so that the key brands can come together and plan for Brexit, given the likelihood that Boris Johnson’s government will shoot for a no-deal departure.
Supermarkets are not the only companies affected. Car manufacturers and other goods manufacturers are also facing difficulties, both in terms of supply chain and exports, and also labor. Analysts now fear that there is a very real risk of a recession as the economy has started to contract.