HomeFinancial MarketsUK Experiences Sluggish Recovery From Bank Holiday Slump

UK Experiences Sluggish Recovery From Bank Holiday Slump

The UK economy embarked on a slower-than-expected recovery following the extra bank holiday in June with construction and other industrial production slowing down by 0.8% and 0.3% respectively.

The Office for National Statistics reported on Monday that the 0.2% economic growth leading up to Queen Elizabeth II’s Platinum Jubilee was reversed by a 0.6% decline after the extra day off from work resulted in a production halt. This is lower than the economists’ expected 0.3% growth rate.

Analysts at Nomura and Deutsche Bank expect the economic slump to sustain following the day of morning marking the queen’s death as well as the planned holiday on September 19 when the queen’s funeral will take place. Despite the measures being implemented by Prime Minister Liz Truss to curtail further increases in natural gas and electricity costs, analysts believe that such disruptions could push the United Kingdom into recession before the end of the current quarter.

Yael Selfin, the chief economist at KPMG UK, stated that the rising costs faced by businesses and households combined with the squeeze on households’ income make a recession all the more likely.

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