ICYMI - VERY ugly economic report from the UK on Thursday: living standards to fall by 7%

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ICYMI - VERY ugly economic report from the UK on Thursday: living standards to fall by 7%

<p>Justin had the main points on Chancellor Hunt's update:</p><ul><li><a href="https://www.forexlive.com/news/uk-finance-minister-hunt-delivers-autumn-statement-20221117/" target="_blank" data-article-link="true">UK finance minister Hunt delivers Autumn Statement</a></li></ul><p>and:</p><ul><li><a href="https://www.forexlive.com/news/pound-unimpressed-by-hunts-fiscal-statement-20221117/" target="_blank" data-article-link="true">Pound unimpressed by Hunt's fiscal statement</a></li></ul><p>Also from the UK on Thursday was the government's Office for Budget Responsibility (OBR) update. Its makes for dour reading indeed. </p><p>Full text can be found from this summary here:</p><ul><li><a href="https://obr.uk/overview-of-the-november-2022-economic-and-fiscal-outlook/" target="_blank" rel="nofollow">Overview of the November 2022 Economic and fiscal outlook</a></li><li>In the UK, CPI inflation is set to peak at a 40-year high of 11 per cent in the current quarter, and the peak would have been a further 2½ percentage points higher without the energy price guarantee (EPG) limiting a typical household's annualised energy bill to £2,500 this winter and £3,000 next winter. Rising prices erode real wages and reduce living standards by 7 per cent in total over the two financial years to 2023-24 (wiping out the previous eight years' growth), despite over £100 billion of additional government support. The squeeze on real incomes, rise in interest rates, and fall in house prices all weigh on consumption and investment, tipping the economy into a recession lasting just over a year from the third quarter of 2022, with a peak-to-trough fall in GDP of 2 per cent. Unemployment rises by 505,000 from 3.5 per cent to peak at 4.9 per cent in the third quarter of 2024.</li></ul><p>Underlining is mine. </p><p>This is a graph from the report ... the scale over on the left is a bit naughty (a chart crime some would call it) but nevertheless, the plunge is shocking. </p>

                This article was written by Eamonn Sheridan at forexlive.com.

Source: ICYMI - VERY ugly economic report from the UK on Thursday: living standards to fall by 7%

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