Chancellor Sajid Javid insists he is ‘not expecting a recession’ despite fears for the economy after shock figures show it shrank for the first time since 2012
- Sajid Javid said Friday he is not expecting a recession despite economy fears
- The UK’s economy shrank for the first time since 2012 in second quarter
- The surprise fall means the economy in the red for the first time in 7 years
- The figures will heap pressure on Boris Johnson amid fears over No Deal Brexit
Chancellor of the Exchequer Sajid Javid said he is not expecting there to be a recession.
The UK’s economy shrank for the first time since 2012 in the second quarter of this year, as the manufacturing and construction sectors both slumped.
Gross Domestic Product (GDP) decreased by 0.2% between April and June, according to figures released on Friday by the Office for National Statistics (ONS).
Chancellor of the Exchequer Sajid Javid (pictured on a visit to the National Grid site near Newark today) said he is not expecting there to be a recession
UK plc shrank by 0.2 per cent over in the second quarter, confounding economists who had expected it to flatline
The technical definition of a recession is two consecutive quarters of negative economic growth.
Mr Javid said the reason for ‘volatility’ was uncertainty about Brexit, which could be resolved by leaving the EU on October 31.
Asked if the growth figures signalled the UK was heading towards a recession, Mr Javid told Channel 4 News: ‘I don’t accept that for a single second.
‘I’m not expecting a recession, there is not a single leading forecaster out there that is expecting a recession, the independent Bank of England is not expecting a recession.
‘And you know why they’re not? It’s because the fundamentals are strong, that’s the first thing.
‘Our economy since 2010 because of the hard work of the British people has grown by 19% and we have more people employed than ever before.’
He added: ‘The reason we are seeing volatility in numbers – higher results in the first quarter, lower in the second quarter – the reason we’re seeing this is because businesses are trying to work around Brexit and there’s too much uncertainty.
‘The way to end that uncertainty is to make sure that we leave as planned which is (on) October 31.’
Mr Javid said the reason for ‘volatility’ was uncertainty about Brexit, which could be resolved by leaving the EU on October 31
Mr Javid’s comments come after Sterling hit 1.2074 dollars, passing the 31-month low it reached on August 1 and down from 1.2138 dollars last night, before recovering slightly. Against the euro, the pound sank to a new two-year low of 90.70 pence
He continued: ‘When you look at the growth forecast for the UK for this year, the IMF forecast that we will grow faster than Italy, than Germany, than Japan, they forecast we would grow at the same rate as France.
‘But what is most important to me, especially as Chancellor, is that our economy remains strong and we are actually, in terms of fundamentals, one of the strongest economies in the developed world.’
Mr Javid’s comments come after Sterling hit 1.2074 dollars, passing the 31-month low it reached on August 1 and down from 1.2138 dollars last night, before recovering slightly. Against the euro, the pound sank to a new two-year low of 90.70 pence.
The grim figures will heap pressure on Boris Johnson (pictured on a visit to a science park near Oxford yesterday) over Brexit
It means that already badly-hit holidaymakers setting off on holiday abroad face getting even less spending money for the pounds in their pockets.
Businesses have been blaming uncertainty over the UK’s future ties to the EU for a slowdown.
It comes after growth accelerated to 0.5 per cent in the first quarter, driven by the highest quarterly pick-up in manufacturing since the 1980s as the original Brexit deadline loomed.
With the UK’s departure from the bloc now rescheduled for October, companies which spent the first three months of the year stockpiling are thought to have been using up their stores.
Manufacturing and construction activity also reduced to cause the drop.
The figures will heap pressure on Boris Johnson amid fears over a No Deal Brexit.
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