UK enters recession as GDP drops 20.4% in April-June Business

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In Europe a few weeks ago we saw production declines in the latest Q2 GDP figures from Spain where we saw a production drop of -18.5% in Q2 towards l Germany which experienced a more modest drop of -10.1%. , while the United States saw production fall by -9%.Today’s UK figures should be no less disappointing, with estimates ranging between -15% and -25% for the second quarter, a sharp drop from the -2.2% contraction seen in the first trimester.

Whatever the numbers are, and they won’t be pretty, the most important question is how fast the UK economy can bounce back, and we’ve seen some progress in that regard. Today’s numbers will cover the sharp drop seen in April, which monthly numbers showed as a -20.4% drop, followed by a 1.8% gain in May.

This means we need to see a sharp acceleration in the June figures, to bring the quarterly figure back to the mid-teens, given the UK’s higher reliance on services, which may well dampen the prospect of a form in V rebound, due to the slow pace of economic reopening.

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