«Too many risks»: the uncertainty on brexia affects the GDP growth rate Velikobritaniia link
By the end of this year, UK GDP could grow by only 1%, experts say the Bank of England. A slowdown experts attribute primarily to political uncertainty on the issue of breccia. Analysts do not exclude that the decrease of foreign trade turnover and the withdrawal of major financiers because of the «divorce» with the EU will lead to difficulties in the economy in 2020.
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According to the forecast of the Bank of England, the growth rate of UK GDP by year-end would amount to only 1%. According to the National Bureau of statistics, after falling 0.2% in the second quarter of 2019 GDP grew by 0.3% in the third quarter. Compared to the corresponding quarter of 2018, GDP grew by 1%, which is the lowest rate of growth since the first quarter of 2010.
The drivers of economic growth in the third quarter of 2019 began, services and construction. The positive effect on GDP growth has increased government spending and population. In the industry and mining sector began to stagnate. During this period also did not increase the volume of investments.
It is noteworthy that in 2015 the GDP growth of the United Kingdom exceeds 2%. After most people in the UK voted to secede from the EU, the country’s political crisis: already, the two governments are unable to spend brakcet and resigned.
Politicians failed to develop a plan to «divorce» with the EU, as a result, the output from the EU repeatedly postponed. In October, the Parliament prohibited the Prime Minister Boris Johnson to hold brakcet without additional agreements with the EU.
Against this background, in the last quarter of 2019, the indicator of business optimism of the Confederation of British industry for the UK fell from -32 to -44 points.
It is curious that the Bank of England expects a recovery growth, which could reach 1.6% already in 2020. The world Bank, adoption of the agreement on withdrawal from the EU and the completion of brexia «disperse» the economy and prostimulirujte investment.
It is worth noting that in its forecasts, the Bank of England is based on a scenario in which prexit will occur in late 2019 — early 2020, and between Britain and the EU will be an agreement about free trade zone. Such agreement, as the economists say British Central Bank has already been ratified by the European Union and Canada. Comprehensive economic and trade agreement (CETA) involves the abolition of almost all customs tariffs, the destruction of administrative barriers between countries and cooperation in the field of intellectual property protection.
In conversation with RT, the chief of Department of investments «BCS» Narek Avagyan stressed that next year for the British economy remains too many risks.
«The slowdown in economic growth mainly due to the withdrawal of some companies from investment business in Britain. In other words, the economic slowdown is not caused by social factors. However, I would not expect that in 2020 the economy will again grow at a rate above 2% per year. After brexia be too many risks and too many uncertainties. It is unclear how the new government will pursue an economic policy, especially in the sphere of foreign economic activity. Now have free trade with the EU and the rules of the game clear to all. What will these rules after leaving the EU is an open question,» — said Avakian.
According to the expert, in the case of hard breccia the economy of the UK in the next few years expect a painful process of transformation to a more secluded, and in this case we can not exclude some large European financial institutions from London.
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Now the European Union is the most important trading partner of Britain: foreign trade turnover is £648 billion (nearly $770 billion). The EU accounts for 45% of British exports and 53% of imports. An important article of British exports to Europe is a providing services in the analytical, legal, technical and other spheres.
However, while experts say only one stable factor in the theoretical future growth of the UK economy. We are talking about a low unemployment rate, which now stands at 3.9 per cent. Save index at this level and continuation of growth of wages can encourage more consumer activity.
«As a result of brexia affected the country’s financial sector — could weaken the national currency. The decline in trade between the EU and the UK (expected after breccia) will reduce the volume of financial transactions. The British economy, according to various estimates, you may lose up to 252 billion pounds for 15 years», — concluded the conversation with RT the head of the analytical Department AMarkets Artem Deev.