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Market Update

• Posted by currencies in Brexit, coronavirus, Currency, Economy, GBP, Sterling, UK, Uncategorised
• July 14, 2020
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Britain’s economy stumbled out of its coronavirus-induced slump in May, casting doubt on the chances of a rapid rebound and suggesting more government help to kickstart recovery may be on its way.

Gross domestic product rose 1.8% after lockdown restrictions were eased slightly, the Office for National Statistics said – a smaller rebound than any economist had forecast in a Reuters poll and following a record 20.3% contraction in April when curbs were tightest.

With activity in the services sector having failed to pick up as expected, Tuesday’s figures are likely to fuel doubts about whether Britain will enjoy a quick, ‘V’-shaped bounce back as lockdown curbs are lifted further.

“Today’s figures underline the scale of the challenge we face. I know people are worried about the security of their jobs and incomes,” finance minister Rishi Sunak said.

Last week Sunak announced an extra 30 billion pounds ($38 billion) of stimulus to limit the increase in unemployment.

Britain’s government first closed non-essential shops and other businesses to the public on March 23, shortly after ordering the closure of bars, restaurants and cinemas.

Over March and April economic output slumped by a record 25.9%, slightly more than previously thought, and output in May was 24.0% below its level a year earlier.

The International Monetary Fund forecast last month that Britain’s economy would shrink by more than 10% this year, a historic decline though a smaller one than it predicted for France or Italy.