The UK economy has handled the issues more better than many anticipated
February 10, 2023 4:22 pm
The cost of living problem and strikes that hit the economy hard in December caused the pound to fall in response to the news that the UK narrowly avoided recession last year.
The figures revealed that, following the most recent corrected estimate of a 0.2% fall in the prior three months, the gross domestic product did not change in the fourth quarter. The Office of National Statistics confirmed this today. But when compared to November, the December figure fell by 0.5% right away, raising questions about this year’s early growth prospects. In the G7, the only country with a GDP below pre-crisis levels is the UK.
Britain has stayed away from quarterly GDP declines, which would have qualified as a technical recession. The UK is the only G7 nation that has not entirely recovered from the epidemic, with a GDP 0.8% smaller than it was at the end of 2019.
It is important to keep in mind that the GDP figure is susceptible to revision, so there is a chance that Britain is experiencing a recession. At the end of March this year, the ONS will release a new evaluation. Strikes and the lingering weakness in consumer spending from the cost of living problem continue to be a threat to the economy.
It is anticipated that the Bank of England will need to slightly increase interest rates in the near future to restrain price increases, which will then result in a major reduction in the pressure on the economy. We can only speculate as to how inflation will respond to all of this. It is clear that the fight against excessive pricing pressure is far from done, and while lessening political abrasiveness will benefit the economy, it will also exacerbate current issues.
According to a lot of experts, the first half of this year still appears to be headed for a recession as increased interest rates and a weakening labor market constrain activity. The good news is that many people anticipate that, if there is a recession, it will be quite brief compared to previous ones.
Household expenditure in the UK increased by just 0.1% in the fourth quarter, as I mentioned above, indicating that consumers are going through the worst cost-of-living crisis in generations. In the final three months of 2022, business investment increased by 4.8%, bringing it back to the level it had been at before the epidemic.
This indicates that despite their concerns about the future of the economy, businesses are boosting their spending.
The UK economy grew by 4% overall in 2022, which is significantly less than the 7.6% growth rate seen in 2021. Chancellor of the Exchequer Jeremy Hunt commended the findings after the report’s release, but he also pointed out that the government needed to lower inflation, which hit a 41-year high last year. Hunt said in a statement that “our economy is more resilient than many thought.” “However, we still haven’t found a solution for every inflation-related issue.”
Regarding the technical picture of the GBP/USD, following a significant surge, the bulls almost completely lost their edge. The price needs to rise above 1.2230 to attract buyers back to the market. Only if this resistance fails will there be a greater chance of a rebound to the area of 1.2190, following which it will be feasible to discuss a more rapid decline in the value of the pound up to the area of 1.2240. After the bears take control of 1.2060, from which point the bulls will likely also act more aggressively, it is possible to discuss the return of pressure on the trading instrument. As a result, it is difficult to pass this level. The bulls’ positions will be affected by a breakdown of 1.2060, pushing GBP/USD back to 1.2010.
Regarding the EUR/USD’s technical outlook, the pair is under a lot of pressure. Staying above 1.0700 will cause the trading instrument to move to the 1.0750 area, where it must remain to stop the bear market. Above this point, you can easily reach 1.0790 and update 1.0830 in the near future. Only the breakdown of the 1.0700 support will put more pressure on the pair and drive the EUR/USD to 1.0670, with the possibility of falling to a minimum of 1.0650 if the trading instrument declines.
The material has been provided by InstaForex Company – www.instaforex.com
The cost of living problem and strikes that hit the economy hard in December caused the pound to fall in response to the news that the UK narrowly avoided recession last year.
The figures revealed that, following the most recent corrected estimate of a 0.2% fall in the prior three months, the gross domestic product did not change in the fourth quarter. The Office of National Statistics confirmed this today. But when compared to November, the December figure fell by 0.5% right away, raising questions about this year’s early growth prospects. In the G7, the only country with a GDP below pre-crisis levels is the UK.
Britain has stayed away from quarterly GDP declines, which would have qualified as a technical recession. The UK is the only G7 nation that has not entirely recovered from the epidemic, with a GDP 0.8% smaller than it was at the end of 2019.
It is important to keep in mind that the GDP figure is susceptible to revision, so there is a chance that Britain is experiencing a recession. At the end of March this year, the ONS will release a new evaluation. Strikes and the lingering weakness in consumer spending from the cost of living problem continue to be a threat to the economy.
It is anticipated that the Bank of England will need to slightly increase interest rates in the near future to restrain price increases, which will then result in a major reduction in the pressure on the economy. We can only speculate as to how inflation will respond to all of this. It is clear that the fight against excessive pricing pressure is far from done, and while lessening political abrasiveness will benefit the economy, it will also exacerbate current issues.
According to a lot of experts, the first half of this year still appears to be headed for a recession as increased interest rates and a weakening labor market constrain activity. The good news is that many people anticipate that, if there is a recession, it will be quite brief compared to previous ones.
Household expenditure in the UK increased by just 0.1% in the fourth quarter, as I mentioned above, indicating that consumers are going through the worst cost-of-living crisis in generations. In the final three months of 2022, business investment increased by 4.8%, bringing it back to the level it had been at before the epidemic.
This indicates that despite their concerns about the future of the economy, businesses are boosting their spending.
The UK economy grew by 4% overall in 2022, which is significantly less than the 7.6% growth rate seen in 2021. Chancellor of the Exchequer Jeremy Hunt commended the findings after the report’s release, but he also pointed out that the government needed to lower inflation, which hit a 41-year high last year. Hunt said in a statement that “our economy is more resilient than many thought.” “However, we still haven’t found a solution for every inflation-related issue.”
Regarding the technical picture of the GBP/USD, following a significant surge, the bulls almost completely lost their edge. The price needs to rise above 1.2230 to attract buyers back to the market. Only if this resistance fails will there be a greater chance of a rebound to the area of 1.2190, following which it will be feasible to discuss a more rapid decline in the value of the pound up to the area of 1.2240. After the bears take control of 1.2060, from which point the bulls will likely also act more aggressively, it is possible to discuss the return of pressure on the trading instrument. As a result, it is difficult to pass this level. The bulls’ positions will be affected by a breakdown of 1.2060, pushing GBP/USD back to 1.2010.
Regarding the EUR/USD’s technical outlook, the pair is under a lot of pressure. Staying above 1.0700 will cause the trading instrument to move to the 1.0750 area, where it must remain to stop the bear market. Above this point, you can easily reach 1.0790 and update 1.0830 in the near future. Only the breakdown of the 1.0700 support will put more pressure on the pair and drive the EUR/USD to 1.0670, with the possibility of falling to a minimum of 1.0650 if the trading instrument declines.
The material has been provided by InstaForex Company – www.instaforex.com
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