LONDON (The Standard) – UK Prime Minister Rishi Sunak was warned on Monday that Britain risks being the first G7 wealthy nation to slip into recession and the last one out of it.
Economists predicted that the UK’s economy was in such a dire state after the Ukraine war blow, the Covid pandemic, Brexit and Kwasi Kwarteng’s disastrous mini-budget that it would be a “laggard” compared to the U.S., Germany, France, Canada, Japan and Italy, the other six G7 members.
Arriving in Bali for a G20 meeting of world leaders, Sunak said in G20 meeting, Chancellor Jeremy Hunt will unveil measures in the Autumn Statement on Thursday to “put our public finances on a sustainable trajectory” after investors were spooked by his predecessor’s £45 billion tax-cutting bonanza.
The statement is expected to include painful public spending cuts and tax hikes to plug a £55 billion black hole in the nation’s finances.
But the scale of the UK’s economic crisis was laid bare by a warning from economists Pantheon Macroeconomics after official figures showed Britain’s economy shrunk by 0.2 per cent in the three months to September.
“The UK is the laggard among G7 economies by a growing margin,” it said.
“GDP fell by 0.2 per cent quarter-on-quarter in Q3, whereas it rose by 0.2 per cent in France, 0.3 per cent in Germany, 0.4 per cent in Canada, 0.5 per cent in Italy and 0.6 per cent in the United States.”
It stressed that the economic prospects for “most other European countries are brighter” than for the UK where the Bank of England has warned of a two-year recession.