UK on the brink of recession
GDP data today shows that the mighty services sector is finding the going tough and has sent third quarter into contraction.
There has also been a downward revision to the second quarter from expansion to flat. Outside of this the so-called black Friday sales have helped push up retail sales unexpectedly in November.
(AI Video Transcript)
The UK economy
The UK economy is not doing so great right now. It recently reported a decrease in growth for the third quarter of 2023, which means the economy is shrinking. The services sector, which is a big part of the UK economy, also saw a decrease in the third quarter, which is making things even worse.
Black Friday
But there is a glimmer of hope in the retail sector. Sales during the Black Friday period in November were even better than expected, with a 1.3% increase. This is higher than what experts thought would happen. This increase in sales has actually caused the value of the sterling currency to go up. You can see this on a chart that shows how the value of the currency changes throughout the day.
However, even with the good retail sales numbers, the overall economy is still uncertain. We won't know for sure if the UK is in a recession until we see the results for the fourth quarter. If there is another decrease in growth during that time, then the UK will officially be in a recession. Right now, it's only one quarter of decrease, but the possibility of a recession is looming.
GBP
Despite all of this, the value of the sterling currency has gone up during the day of trading. This is because of the good retail sales numbers and the overall growth numbers. But we don't know what will happen in the future with the economy and how that will affect the value of the currency. We will have to wait and see.
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