British Economy to Contract by 8% in 2020: EY Item Club

Latest estimates by the EY Item Club indicate that Britain’s economy could see a contraction by as much as 8% this year as a result of the coronavirus crisis, while its effects on the economy could last until at least 2023. The EY Item Club revised its outlook for the British economy lower after April’s GDP revealed a 20.4% contraction.

In April, this group of economists had forecast a 6.8% contraction for the year. Meanwhile, the expected contraction in Q2 2020 has also been revised higher, from 13% to 15% in the latest estimates.

Chief economist at EY, Mark Gregory, observes, “This is an undoubtedly challenging environment for businesses and forecasting is extremely difficult. We’ve made some significant adjustments to our GDP expectations compared to what the data told us just six weeks ago.”

According to EY, consumer spending across Britain could fall by 17% in the current quarter and by 8.7% for the entire year, but could see a rebound next year. Meanwhile, total investment could see a decline by 13.7% in 2020.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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