The UK economy unexpectedly shrank in August, strengthening predictions that it will fall into a recession.
The surprise 0.3% drop came as factories and consumer-facing businesses struggled, according to official figures.
Prices are rising at their fastest rate for 40 years, eating into people’s budgets, and outpacing growth in pay.
In normal times, a country’s economy grows and on average, people become slightly richer as the value of the goods and services it produces – its Gross Domestic Product (GDP) – increases.
But sometimes their value falls, and a recession is usually defined as when this happens for two three-month periods – or quarters – in a row, and it marks a sign the economy is performing badly.
The Bank of England has previously said that it expects the UK to fall into a recession by the end of the year.
The latest data from the Office for National Statistics (ONS) means that in the three months to August, GDP also fell by 0.3%.
The drop in the monthly figure for August was driven by a sharp decline in manufacturing and maintenance work, which slowed down the oil and gas sector, the ONS said.
It marked a fall from July, when the UK economy grew by 0.1%.
But ONS Chief Economist Grant Fitzner said that lots of other customer-facing businesses like retail, hairdressers and hotels were “faring relatively poorly” in August.
“The economy shrank in August with both production and services falling back, and with a small downward revision to July’s growth the economy contracted in the last three months as a whole,” Mr Fitzner said.
He added that sports events didn’t generate as much economic value, after the economy had previously been helped by the UK hosting the Women’s Euro Championship in July.
A reduction in the amount spending by the government related to the pandemic was also one of the big causes of the slump in manufacturing, which was hit by pharmaceutical companies cutting back production.
The ONS added that some falls were off-set, however, by some professional services like accounting and architecture.
The construction sector was the only one of the three main parts of the economy to see growth of 0.4% in August.
Some experts expect that September could see an even bigger drop in economic output, with the extra bank holiday for the Queen’s funeral and the period mourning affecting business opening hours, as well as higher costs starting to bite.
Yael Selfin, Chief Economist at KPMG, said that the UK was now “teetering on the edge of recession”.
“The ongoing squeeze on household finances continue to weigh on growth, and likely to have caused the UK economy to enter a technical recession”.
“August’s drop in GDP likely marks the start of a downward trend that will continue deep into next year,” said Samuel Tombs Chief UK Economist at Pantheon Macroeconomics.
Challenges to face
Meanwhile, Suren Thiru, Economics Director for ICAEW (Institute of Chartered Accountants in England and Wales) criticised Chancellor Kwasi Kwarteng’s recent mini-budget for sparking market turmoil and potentially piling extra pressure on firms and families as mortgage rates have been sent soaring.
Mr Thiru said: “The government has needlessly risked a longer recession with any boost from the energy package likely to be dwarfed by a sustained squeeze on UK output from persistently high inflation, punishing interest rate rises and acute financial market turbulence.”
Chancellor Kwasi Kwarteng insisted the government’s energy support package and growth plan will “address the challenges that we face”.
He added said: “Countries around the world are facing challenges right now, particularly as a result of high energy prices driven by Putin’s barbaric action in Ukraine.”
Speaking to BBC’s Today programme, Business Secretary Jacob Rees-Mogg also urged caution in interpreting the most recent ONS monthly figures for August.
He pointed out that monthly figures are often more volatile and “very often subject to revision”.
But he acknowledged that the fall in the economic growth number for August “showed the need for the mini-budget in September to make sure we get back onto a path for growth”.
It comes after the International Monetary Fund (IMF) warned that the worst was still to come for the global economy, while 2023 would “feel like a recession” for many people because of rising costs and the continued fall-out of Russia’s invasion of Ukraine.
The financial institution warned on Tuesday that the UK economy could sharply reduce in 2023 as consumer spending is dented by rising prices and higher interest rates.
It downgraded its forecast for UK economic growth next year to just 0.3% in 2023 – down from 0.5% previously pencilled in.
Rachel Reeves MP, Labour’s Shadow Chancellor, said: “That the IMF yesterday described the “UK like a car with two people each trying to steer the car in a different direction” leaves us an international laughing stock.
She said that the new ONS figures released on Wednesday showed that the UK economy “is still in a dire state because of this Tory government.
“The Conservatives must reverse their disastrous mini-Budget. Any continued failure to do so shows damaging levels of denial from the prime minister and her chancellor.”
The IMF did welcome the news though that the chancellor has brought forward the date for his “economic plan” to 31 October, where he will set out will set out how he will fund tax cuts that he has pledged and reduce debt.
B.C.’s economy forecast to remain steady, despite slower near-term economic growth | BC Gov News – BC Gov News
Like other jurisdictions, B.C. is expected to see slower economic growth through 2023 because of global inflation and higher interest rates, before steady growth resumes in the medium term, according to projections from private-sector forecasters.
Each year, B.C.’s finance minister meets with the Economic Forecast Council (EFC), a 13-member council of private-sector forecasters from throughout Canada, in preparation for the next year’s budget. This is the second year that an additional set of discussions was added, providing an opportunity to consult with an Environmental, Social and Governance (ESG) Advisory Council to explore how the provincial government can continue to build a more inclusive, sustainable economy and support well-being in British Columbia.
The EFC anticipates the province’s economy will grow by 2.9% in 2022 and 0.4% in 2023; slower than their January 2022 forecasts of 4.2% and 2.7%, respectively. The updated figures are similar to what was presented in the Province’s Second Quarterly Report. Real gross domestic product (GDP) growth is then expected to pick up, with an increase of 1.6% in 2024, followed by gains of 2.3%, 2.3% and 2.1% in 2025, 2026 and 2027, respectively. The reduction in the near-term outlook is consistent with other jurisdictions and reflects persistent global inflation and interest rates rising higher and more rapidly than expected throughout Canada.
“We’re entering this period of slower growth and challenging global economic times in a strong position to continue supporting people, because B.C.’s economy grew more than most last year,” said Selina Robinson, Minister of Finance. “We’ll use the resources we have to address the issues that matter most to people, including housing, health care and building a sustainable economy that works for everyone – but no matter what is on the horizon and no matter what the numbers show, this government will continue to be here to support people.”
Discussions with the EFC and the ESG Advisory Council focused on current events, issues affecting B.C.’s economy and the environmental, social and governance opportunities and challenges facing the province. Topics at the meetings included:
- global inflation and monetary policy impacts;
- government policies to stimulate investment and ensure shared prosperity;
- socioeconomic factors in B.C., such as inequality, Indigenous partnerships, and well-being;
- environment, climate change and the transition to a lower carbon economy;
- housing affordability and supply;
- labour market dynamics and immigration; and
- opportunities for businesses to build on B.C.’s strong ESG profile.
“We are committed to building an inclusive economy, where environmental and social sustainability is the basis for future growth,” said Robinson. “A strong social, cultural and economic foundation is key to successful and resilient communities. We know this, and we know generations will benefit from the decisions we make right now.”
Forecasts and feedback from the two councils will be used to inform the next provincial budget, which will be released on Feb. 28, 2023. EFC members will also have an opportunity to submit revised forecasts in early January.
- In the Province’s Second Quarterly Report, B.C. projected a revised operating surplus of $5.7 billion in the 2022-23 fiscal year.
- Since the summer, B.C. has rolled out approximately $2 billion in affordability measures.
- Environmental, Social and Governance are three main categories often discussed when evaluating sustainability performance, risk-mitigation planning and societal well-being.
To read B.C.’s Second Quarterly Report, visit: https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports
For information about new and existing support measures for B.C. residents, visit: https://strongerbc.gov.bc.ca/cost-of-living/
For more about the StrongerBC Economic Plan, visit: https://strongerbc.gov.bc.ca/plan/
To learn about the ways B.C. is committed to environmental, social and governance principles, read the ESG summary report here: https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/government-finances/debt-management/bc-esg-report.pdf
A Look At Canada’s Growing Economy
Canada has one of the largest economies in the world, and the country’s largest industries include real estate, oil, and gas extraction, manufacturing, and mining. By GDP, Canada has the ninth-largest economy in the world. In 2020, Canada’s annual GDP was $1.64 trillion, and roughly one-third of GDP comes from Canada’s import and export of goods and services.
The Canada Special
Canada is home to many big-name brands. E-commerce giant Shopify is headquartered in the country, and central banks like the Royal Bank of Canada (RBC) operate within the country’s financial sector. RBC is regarded as one of the largest banks in Canada and the world. We recently saw HSBC Group agree to sell HSBC Canada to RBC. According to the CEO of HSBC Group, the company considered HSBC Canada’s strategic fit and ultimately found an upside in selling the business. RBC is reportedly buying HSBC Canada for $13.5 billion, which is expected to close in late 2023.
RBC’s top executive sees its planned purchase of HSBC Canada as a “once-in-a-generation” chance for the bank to expand its lead in the country’s heavily concentrated financial market https://t.co/IVTyKnu9bt
— Bloomberg Markets (@markets) November 30, 2022
Growing Canadian Markets
Canada’s economy is constantly growing, too. RBC’s acquisition of HSBC Canada demonstrates this, but many other industries have taken off in the country over the years. One of the fastest-growing industries in 2022 is iGaming. iGaming refers to any online betting, such as online casino games and sports betting. This growth reflects a worldwide trend, where the global iGaming market is projected to grow to $114 billion by 2028.
In particular, Ontario’s iGaming market is leading the way in Canada. Total iGaming revenue in the second quarter of 2022 in Ontario’s iGaming market reached $267 million, up from the $162 million recorded in the first quarter of 2022. Likewise, total wagers, active player accounts, and average monthly spend per active player account increased in Q2 2022 in Ontario. Total bets entered the billions, jumping from $4,076 million to $6.04 billion in the second quarter.
Several operators and websites specializing in different areas of iGaming are live in Canada, helping the Canadian market reach a broader target audience. According to this review site, some of Canada’s most popular online casinos include LeoVegas, which specializes in mobile gaming, and Wildz. Wildz is an online casino known for offering lucrative casino bonuses. Canada’s iGaming market also offers French-speaking online casinos for Canadian players who want to speak French. This is particularly relevant in Quebec, a French-speaking province.
Interestingly, Canada’s iGaming market is rising simultaneously with the country’s eSports industry. In 2022, revenue in Canada’s eSports market is expected to reach nearly $25 million. This growth is attractive because eSports is a sector that the iGaming market is looking more into incorporating. People have shown that they enjoy placing wagers on eSports tournaments as they do with regular sports tournaments like the World Cup.
Canada has one of the largest economies in the world, so it’s no surprise to see the country continuing to push boundaries and grow its success in budding new industries like iGaming and eSports. Even though these are two competitive markets, Canada appears to have gotten its foot in the door already.
Personal Loans with the Lowest Interest Rates
Need a loan quickly? With the loans that Canadian lenders provide you, starting your dream company or even paying your bills is made easy for you.
Only individuals are eligible for personal loans in Canada, and most banks and lending institutions impose restrictions on how and why you can use one. Personal loans can be of different types, such as secured, unsecured, and credit-building loans. Lenders may have different terms and interest rates for personal loans. Some lenders require you to provide your credit score, while others do not.
If you hope to find rates that won’t affect your credit, you have come to the right place. These lenders give quick loans with interest rates as low as 3%. Let’s discuss some of these lenders and how they stand out:
- Loans Canada
Loans Canada is one of the best lenders for Canadians who need to borrow money for almost any cause. You can trust that the terms of any quotes you’re pre-approved for are the conditions you’ll receive, thanks to Loans Canada’s great reputation and broad network of financial institutions. With funding for some loans available in as little as 24 hours, lenders often offer interest rates as low as 1.99%, but the rates go as high as 46.96% on amounts ranging up to $50,000.
There are lenders on the platform who cater especially to those with bad credit, and there are no credit or income requirements stated on the site. The loan term varies from 3 to 60+ months for borrowers to pay back.
LoanConnect is an entry point to numerous lenders via a single application, not a direct lender. The lenders on LoanConnect offer short-term, unsecured loans, some of which are available to borrowers with bad credit or a history of bankruptcy.
A competitive 5.99% APR is the starting rate for LoanConnect lenders, but some can go as high as 46.96% APR, depending on the applicant’s credit history. To be eligible for this loan, you must be a citizen of Canada and meet certain age requirements.
Prospective borrowers can submit an online loan application in just a few minutes, receive loan approval in about 5 minutes, and typically receive their funds the same day. There are no additional fees for applying.
Borrowell offers a range of financial services and is one of Canada’s top providers of personal loans. With over 50 financial partners and seven years in operation, Borrowell has created a strong network to assist you in finding unsecured loans that meet your requirements.
You can borrow between $1,250 to $10,000, and you have 36 to 60 months to repay the loan with regular payments. The interest rate is 19.99%. The platform is free, but there’s a one-time origination fee of 1% to 5% that you must pay.
You must meet the following requirements to be considered: a credit score of at least 660; a minimum annual income of $20,000; solid credit history and credit utilization; and a manageable debt service ratio. Also, you should obtain a free Equifax credit score, review the offers that correspond to your credit profile, and select the best offer to accept.
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