The British economy contracted for the second month in a row in April due to rising inflation. Gross domestic product contracted by 0.3 percent, according to data from Britain’s statistics agency ONS. This has heightened fear that the UK economy will end up in recession.
In April, UK inflation was around 9 per cent. This is the highest rate in 40 years. In addition to rising prices, supply chain problems are also hampering business activity in the country.
The British economy actually contracted in March by 0.1 percent. Unlike other months, April saw declines across all sectors. The services, manufacturing and construction sectors, among others, contributed negatively.
The Bank of England (BoE) previously warned of a sharp slowdown in the economy as a result of rising inflation. The central bank said inflation could reach more than 10 percent in the fall. The Bank of England is already raising interest rates to curb high inflation. The bank will make a new interest rate decision later this week.
There is also high inflation in Europe and the Netherlands. In May, life in the Netherlands became 8.8 per cent more expensive compared to the previous year. In April, the average rate of inflation in the European Union was 8.1 percent. Estonia and Lithuania lead the way with inflation of 19.1 and 16.6 percent, respectively, in that month.
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