Why did the UK economy collapse?

Data released by the British Statistics Agency this Thursday (22) showed that economic output in the United Kingdom fell by 0.3% in the third quarter compared to the previous three months. According to earlier estimates, the reduction would be 0.2%.

As a result, the agency noted, the UK economy is at the bottom of the seven richest countries on the planet. Local business investment also fell by 2.5% in the quarter. However, the forecast is for a 0.5% decline.

The British economy was still down 0.8% at the end of 2019 in the third quarter. And, in this regard, the earlier estimated figure was 0.4%. That is, half of the fall.

In the third quarter, the services sector expanded 0.1%, according to local authorities. But this performance was overshadowed by negative performance in industrials and construction.

Brexit is a failure

Brexit, the exit of the United Kingdom from the European Union (EU) in January 2020, has worsened the British economy. The result was revealed in an analysis published by a British newspaper in early December Financial Times🇧🇷

The results of the study indicated that Brexit impoverished households, stagnated wages, reduced investment by companies and new trade barriers only harmed economic relations with the EU.

Bank of England Governor Andrew Bailey has assessed Brexit More than 3% will cause a long-term decline in productivity levels. The reduction in the overall economy would be 4%. According to another estimate, in 2016, the British economy was equivalent to 90% of Germany’s. Now that number is down to 70%.

Recent data is also not encouraging. The inflation rate hit 11.1% in October, a 41-year low. Along with that, the Bank of England (BoE) last week raised the base interest rate from 3% to 3.5%. This was the ninth consecutive increase in the indicator, which reached its highest level since 2008.