Economy

UK economy stumbles in July as strikes and rain weigh

Published

1 year ago

September 13, 2023

LONDON, Sept 13 (Reuters) – Britain’s economy contracted in July at an unexpectedly sharp rate after strikes in hospitals and schools as well as unusually rainy weather weighed on output, according to official figures on Wednesday that will add to worries about the outlook.

The Office for National Statistics said gross domestic product shrank 0.5% in July from June, worse than all forecasts in a Reuters poll of economists that had pointed to a contraction in gross domestic product (GDP) of 0.2% from June.

Output had risen 0.5% in June, and the economy grew 0.2% over the three months to the end of July.

Sterling shed around a third of a cent against the dollar on the data, which showed all major sectors of the economy – services, manufacturing and construction – declined in July.

The data underlined signs that Britain’s economy is weakening, perhaps by more than the Bank of England had expected ahead of its September interest rate meeting.

Data on Tuesday showed a faster rise in the unemployment rate than the central bank expected, although the BoE remains worried that strong wage growth will fuel persistent inflation.

“The speed of the slowdown could be indicating that recession is around the corner,” said Neil Birrell, a fund manager at Premier Miton.

“Either way, it does suggest that higher interest rates and sticky inflation are having a more significant effect on the economy.”

However, Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said he doubted Wednesday’s data marked the start of a falling trend, given the one-off drivers of the drop in output.

The ONS said the health sector was the biggest driver behind the 0.5% drop in services output and cited increased industrial action by doctors which led to nearly 200,000 cancelled appointments. Schools in England also saw strikes.

Unusually wet weather in July hurt output at retailers and in the construction sector, which fell 0.5%, the ONS said.

Wednesday’s data does not include recent, substantial upward revisions to the performance of Britain’s economy up to the end of 2021.

Reporting by Andy Bruce and David Milliken; Editing by William James and Alison Williams

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

1 day ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

2 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

3 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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