Britain’s biggest economic recession in 3 centuries.. retail sales are falling and inflation is rising

Britain’s biggest economic recession in 3 centuries.. retail sales are falling and inflation is rising
Britain’s biggest economic recession in 3 centuries.. retail sales are falling and inflation is rising

Britain is facing the biggest economic recession in three centuries, at a time when labor shortages due to the departure of tens of thousands of people after “Brexit” threaten the economic recovery with rising inflation expectations.
More than 200,000 European Union citizens left the United Kingdom last year due to Britain’s exit from Europe and the economic crisis, according to Bloomberg News.
And figures from the British Office for National Statistics yesterday indicate that there are 3.5 million EU citizens, living in the country, compared to 3.7 million in 2019.
The number of non-EU citizens changed slightly, reaching 2.6 million, and this loss helps explain why Britain is experiencing a labor shortage, which has led to empty shelves in stores, soaring prices and threatening recovery from the economic recession due to the pandemic.
Sectors such as retail and hospitality rely heavily on EU workers, and it is not clear how many of those who have left the country will return. The pandemic has hit Britain harder than most countries, and immigrants may find attractive opportunities at home.
Britain’s retail sales unexpectedly fell for the fourth month in a row last August, in the worst continuous series of declines in at least 25 years, indicating that the increase in cases of Corona virus and the disruption in the movement of supplies cast a shadow on sales. .
Britain’s Office for National Statistics said the volume of goods sold in stores and online fell in August by 0.9 per cent compared to July when sales fell by 2.8 per cent.
And Bloomberg News reported that economists had expected sales to rise 0.5% in August.
Doubts are now growing about the future of consumer spending that fuels the British economy. Millions of British families are currently facing the risk of high rates of infection with the Corona virus, as well as a sharp decline in living standards after the significant increase in inflation rates.
“These figures raise more concerns about the slowdown in the pace of the British economy’s recovery, and that the recovery of consumer demand in the country has already reached its peak,” Bloomberg quoted Stuart Cole, chief macroeconomist at Equity Capital Financial Services.
In addition, a survey showed that British consumers expect inflation to remain above the Bank of England’s target for the next five years, at least, in a sign that opinions on higher prices are solidifying.
Participants in the survey conducted by market research firm Kantar on the quarterly inflation rate at the Bank of England expected prices to rise 2.7 per cent over the next year, compared to 2.4 per cent forecast for last May.
Consumers participating in the survey also expect prices to rise 3 percent over the next five years. All consumers’ opinions on inflation are above the 2 percent target for the central bank.
The central bank monitors opinions on inflation carefully, and seeks to maintain perceptions that the overall level of prices will remain stable to prevent a spiral of expectations that would lead to higher costs and wages in various sectors of the economy.
In recent weeks, British policymakers have sought to reduce concerns about how to prevent an overheating of the economy.
And “Bloomberg” indicates that the British government has begun evaluating how it will reduce the financial stimulus that it has injected into the economy since the beginning of the outbreak of the Corona virus.
“He is one of those officials who thinks the minimum criteria for tightening monetary policy have been met,” says Andrew Bailey, governor of the Bank of England.
The Bank of England expects price hikes to peak at 4 per cent by the end of the year – double the target – and then decline in 2022 and 2023. The poll was conducted from August 10 to August 16 last.
The survey shows that 43 percent of respondents expect interest rates to rise in the next 12 months, compared to 39 percent in May.
On the other hand, a news report said that Britain’s Department of Commerce, Energy and Industrial Strategy intends to allow employees to request flexible working conditions from the first day of any new job, instead of the current 26-week period.
And Sky News TV, quoting an unnamed source, reported that this step could be announced in the coming days, which were originally scheduled before the general elections held in 2019, according to the Bloomberg news agency.
The station added that it “will give employees the right to request flexible working hours, taking into account the time, hours and location of work.”
A government spokesperson told Sky News, “As stipulated in the 2019 statement, the government is committed to consulting on making flexible working hours the basis, unless the employer has a reason not to do so, which enhances productivity at work and helps even More employees to join the labor market, and our proposals will be published soon.”
US bank JPMorgan Chase plans to launch a digital retail banking service in Britain next week, the first step in the bank’s plans to expand its retail banking business outside the United States.
The new service, called Chase, is scheduled to start next Tuesday, by allowing customers to open current accounts online, according to Bloomberg News, citing an informed source.
Sanuki Viswanathan, head of international retail services at JP Morgan, said in an interview with the British Financial Times, “The services that the American bank will provide through its new electronic platform in Britain will increase over time, as the bank intends to invest hundreds of millions of dollars in this platform.”
This comes at a time when the consumer banking market in Britain has witnessed strong competition in recent years with the emergence of emerging companies for digital services such as Monzo Bank and Starling Bank.
The US bank Goldman Sachs Group also launched its digital service Marcus in Britain 2018. “JP Morgan has been planning to enter the online retail banking market in Britain two years ago,” Viswanathan told the Financial Times.
The British bank had agreed to buy the digital wealth management fund Notembg Saving and Investment last June, indicating that the bank was considering further acquisitions.
Viswanathan added that “the bank wants to become an influential force in the retail banking market in Britain, with the potential to expand into Europe and Latin America.”

 
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