The UK economy continues to be in a dangerous state where in November GBP UK continues to contract as the lockdown measure is introduced. Despite the decline in economic growth, it is smaller than expected because the people have been able to adapt to the situation and schools are still open. This indicates that the probability of a second economic recession is very low.
Official data on Friday reported that the monthly decline was 2.6%. This is the first time since April, the contraction recorded is less than half the target of economists. The reading was also much smaller than the fall in April of 18.8%.
The sixth largest economy in the world contracted more than any other country in the first half of 2020 and the current contraction is 8.5% smaller than in the contraction recorded in February.
The third tightening lockdown imposed in January is expected to cause the British economy to shrink in the first quarter of 2021. Plus many business sectors were affected by the post-Brexit deal.
BoE Governor Andrew Bailey said this week that it was too early to announce further stimulus measures after the central bank increased its bond purchase program to nearly $ 1.23 trillion in November.
Friday data showed the British economy in November was 8.9% smaller than the previous year (year count). The GBP continued to depreciate against the US dollar by 0.57% to the exchange rate of 1.3609.
