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The British economy contracted in the second quarter

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The Bank of England, in central London, 7 February. ADRIAN DENNIS / AFP

The figure is bad, but it's not really a surprise. In the second quarter, the British economy contracted by 0.2%, according to figures released Friday, August 9 by the National Office of Statistics (ONS). This is the first decline recorded since the end of 2012. A little stronger than anticipated by the economists, this deterioration contrasts with the good figures of the first quarter (+ 0.5%). As the new prime minister, Boris Johnson, prepares for a "no deal" on October 31 – namely, an exit without agreement from the European Union (EU) – the Uncertainties surrounding Brexit continue to weigh on the economy.

In retail, only services contributed slightly to Gross Domestic Product (GDP): they rose 0.1% between April and June, their smallest increase in three years. On the other hand, industrial production shrank by 1.4%, partly penalized by trade tensions between Washington and Beijing and, above all, by Brexit-related confusion.

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In the first quarter, when the initial date for a possible exit from the EU was set for March 29, companies accumulated large stocks, which artificially boosted growth. "In return, the activity fell over the next three months, when the private sector spilled these stocks, explains Andrew Goodwin, Oxford Economics, London. The picture is therefore a little less gloomy than GDP figures may suggest at first reading. AT"

In addition, several factories, particularly automobiles, had advanced their maintenance operations in April rather than in the summer. Cautious, they dropped the curtain for a few weeks, in order to avoid the degenerations generated by an eventual "no deal". As a result, auto production plunged more than 20% in Aprilâ € | before recovering in May.

This illustrates the paradox in which the British economy is struggling. More than three years after the 23 June 2016 referendum on the exit of the EU, the Brexit, whose date is still uncertain, is causing turmoil in the economy, but its effects remain for the time relatively contained. Thus, household consumption resists rather well. "According to our forecasts, it should grow by 1.7% this year"says Goodwin. The British purchasing power is maintained by the good performance of wages and the low unemployment rate, falling to 3.7% in April, according to Eurostat, the lowest in 44 years.