The UK economy is showing dangerous signs of shrinking after new figures released by top economists warned of a ‘no-deal Brexit recession’ should the country crash out of the European Union on October 31st.
According to data released by the Chartered Institute of Procurement and Supply (CIPS), the economy suffered its first quarterly contraction in nearly seven years.
Many are already placing the blame on the looming uncertainty of Brexit and the current instability of political leadership, which has prompted a sudden halt in business activity across the UK.
Sector By Sector
Some industries have taken the biggest hit from this suddenly shrinking economy – the services sector, which makes up a significant four-fifths of the UK economy has stagnated in growth, with little to no change being reported from the previous quarter.
Even the manufacturing and construction industries, whilst smaller, have raised warning flags as their growth has sunk into reverse.
Figures suggest the economy contracted by 0.1% in the previous quarter and while this may seem like a small number, it can have disastrous knock-on effects for British industry. Other backbone industries like finance, transport and telecommunications have also seen a sudden slowdown of activity.
The Bank of England has also warned investors that the sudden boost in early March that saw the first quarter rise just slightly was not to be prolonged and was primarily due to the bulk-buying of raw goods and materials in the run-up to the original March deadline for Brexit.
Many believe that continued negative growth in the third quarter could see the country heading for another major recession before the end of October.
The last time GDP shrank in a manner like this was in the last three months of 2012, while Britain was still attempting to recover from the recession with Conservative policies of austerity.
However, experts are now suggesting that this sudden decline in growth is actually the worst economic performance of the decade, thanks to Brexit-related uncertainty for both domestic and international companies.
However, this situation is not unique to the UK economy. Currently, the global economy is also experiencing a slowdown in growth, including the USA, Germany and Spain.