The UK economy shrank by 2%, the worst fall since the financial crisis of 2008.
The Office for National Statistics (ONS) said the economy contracted by 2% in the three months to March, following zero growth in the final quarter of 2019.
The decline was marked by a record fall in March 2020, and reflects only ‘one‘ full week of lockdown. Analysts expect a bigger economic slump in the current quarter. Is the UK now in recession?
The UK is not alone facing such dire GDP data.
To soon to open?
UK begins first day of easing lockdown measures today (Wednesday 13th). Some say it is too soon and too fast. The U.S. may give a clue here as they too are struggling to open their economy. Dr Fauci, the leading disease expert in the U.S., warned yesterday of dire consequences if states open too fast.
He is worried about a second virus wave that will push the U.S. economy further back. The UK too should be more concerned. We may force the economy open now but at what ultimate cost, more deaths later?
SAGE 2?
The official government advisory body, SAGE has reportedly been challenged by an alternative SAGE group (Independent SAGE), it too is made up of professionals and scientists. It would appear, from recent reports, that they suggest the UK must do more to suppress the virus. It was suggested by the group that, ‘flattening the curve’ or ‘ensuring the NHS is not overwhelmed’ was a counter productive attitude without the suppression of the virus too.
Other news moving the markets today
The UK is to consider cancelling all ‘over seas’ holidays this summer and have introduced a 14 day quarantine period for UK visitors. Welcome to the UK! Mind you, however unpalatable this measure is, it is long overdue.
Estate agents gear up for business again in the UK as house sales re-start.
UK furlough scheme extended until October 2020.
In the U.S. today at 14:00 BST – Jerome Powell will make a speech. This is likely to move markets, so watch out for this later.
U.S. House of Democrats are about to chuck even more trillions of dollars into the U.S. economy. More debt then to deal with later?
U.S. stocks closed down on Tuesday, sliding sharply in the final hour of trading. The Dow closed down at: 23765
European stocks generally pull back or tread water at least this morning, as fear grips economies as they struggle to ‘open’. European Indices appear under pressure so far today.
Will we see negative interest rates in UK? The UK has talked about them! Both Japan and Europe has struggled with them, Trump likes the idea of them, apparently, because other countries have them? That’s good then.
They are not good and I sincerely hope it does not happen. But with so much ‘free’ money (QE) from central banks sloshing around the system it may happen, but let’s hope not.
Market moving news to look out for
Australia – job data due overnight Thursday 14th.
Germany – consumer price data due Thursday at 07:00 BST.
U.S. – jobless claims (initial) – due Thursday at: 13:30 – this is a big one to watch!