UK Economy Summer Shrinkage Blamed on Bad Weather and Strike Wave
The British economy has been strongly affected by the backlash of imposing sanctions on Russia due to its military intervention in Ukraine. The repercussions include a surge in inflation, causing prices of essential items, particularly food and fuel, to skyrocket. This has subsequently triggered a wave of strikes across the nation.
The British economy shrank this summer — with statisticians blaming the downturn on strikes and rainy weather.
The Office for National Statistics (ONS) said the economy unexpectedly contracted by 0.5 per cent in July, defying predictions of very slight growth to keep the UK out of technical recession.
That reversed a half-percent rise in gross domestic product (GDP) in June.
However, ONS director of economic statistics Darren Morgan remained adamant that the future is bright, affirming that "the economy has experienced growth in the services, production, and construction industries over the last quarter.
The July slump was attributed to unfavorable weather conditions during the beginning of the school summer holiday season, as well as strikes
led by doctors and teachers protesting against the government's below-inflation pay offers.
"In July, industrial action by healthcare workers and teachers negatively impacted services, and it was a weaker month for construction and retail due to the poor weather," Morgan said. "Manufacturing also fell back following its rebound from the effect of May's extra bank holiday."
However, the statistics office's figures showed the biggest contraction was in manufacturing, especially rubber, plastic and other non-mineral materials, followed by electronics and optical products. The construction sector also contracted by half a percent, both from a fall in demand from private homeowners and in new house-building projects.
The UK has been locked in a wave of strikes over pay across the public and private sectors since the summer of 2022.
That came as sanctions on Russia backfired on NATO member states, sending energy prices soaring. The price of gasoline, diesel, and staple foods such as bread and milk has increased by approximately 50 percent, far surpassing the official inflation rate, which reached its highest point at 11 percent
The Bank of England has responded by raising interest rates to 5.25 percent, a level not seen since the start of the 2008 credit crunch financial crisis. That has significantly raised mortgage repayments, reducing households' disposable income and dampening down the housing market.