|
|
The odds were evenly balanced that the economy would slide into two consecutive quarters of contraction – the definition of a recession – as the threat of a no-deal Brexit took its toll on business and consumer confidence.
The economy contracted by 0.2% in the second quarter of the year. Predictions for the three months to the end of September vary from a second contraction of 0.2%, which would fulfil the criterion of a recession, to a positive o.2%.
Analysts said the troubled UK economy was slowing against the backdrop of Donald Trump’s trade war with China, which has dragged on global growth more than was expected in February 2018 when the US president first threatened Beijing with higher import tariffs.
The tariffs directly affect only a relatively small percentage of global trade but Washington’s persistent threats to widen their scope and target the EU and India have had a chilling effect on business investment and manufacturing production.
Germany is poised to enter a recession, China’s economic growth has stalled and while GDP is still expanding in the US , growth has slowed to half the rate it enjoyed 18 months ago.
Uncertainty surrounding Britain’s exit from the EU has added to the growing fear of a more comprehensive global downturn that could push the world economy into recession, possibly as early as next year. [...]