World Cup drinkers boost UK GDP, reduce recession risk

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LONDON (Reuters) Jan, 13 The UK economy unexpectedly showed some growth in November after World Cup boosts in drinker and video game sales, unlikely to be already in recession However, the outlook for 2023 remains grim.

Gross domestic product he rose 0.1% from October. Friday’s National Bureau of Statistics figure beat all forecasts in a Reuters poll of economists, which showed a rise of 0.2.

The growth surprise means that production would have to plunge about 0.5% in December for the UK to record its second straight quarter of GDP decline. This is the commonly used definition of recession in Europe.

Britain, the world’s sixth-largest economy, shrank by 0.3% in the three months to the end of September, affected by business closures to mark Queen Elizabeth’s funeral.

HSBC economist Liz Martins said the UK could avoid a recession if the wind picked up. “Going forward, we expect GDP to contract through the third quarter of this year as consumer spending is likely to weaken as pressure on household real incomes increases,” said Thomas Pugh, an economist at accounting firm RSM UK. there are,” he said.

High inflation sparked a wave of strikes by public sector and railroad workers demanding higher wages.

“The most important thing we can do to help is stick to our plan to halve inflation this year and get the economy back on track,” Treasury Secretary Jeremy Hunt said.

The Bank of England he predicted in November that inflation would drop to around 5% by the end of the year. Investors expect the BoE to raise interest rates from 3.5% to 4% on February 2. 2 because it seeks to eradicate underlying inflationary pressures.

Britain’s large services sector was the best-performing part of the economy in November, with output up 0.2% in the same month despite widespread rail and postal strikes. .

Much of the increase reflected people heading to pubs to watch the men’s World Cup, according to the ONS, with spending on food and drink up 2.2% and spending on video games early in the run-up to Christmas. is also reflected.

Manufacturing output fell by 0.5% due to a drop in pharmaceutical production, which was often volatile.

GDP fell by 0.2 percentage points in November due to the seasonal decline in COVID-19 vaccines. The UK’s goods trade deficit widened to £15.6bn ($19.1bn) in November, slightly above the £14.9bn forecast in a Reuters poll.

Trade with the European Union has been affected by Brexit, but the extent is difficult to assess due to changes in data collection, discrepancies between UK and her EU data, and the impact of the pandemic.

HSBC’s Martins said exports have increased by nearly 20% since June, and his latest ONS data show that exports to the EU are now up 4.5% from pre-pandemic lows, while exports outside the EU are up by 4.5%. exports have increased his 4.5%. The EU is 0.4% above pre-pandemic levels.