Fragile state of UK economy scrutinised as nation mourns
The fragile state of Britain’s economy will be underlined this week by official figures showing a renewed slump in consumer spending amid soaring living costs, before a possible slowdown in activity during the national period of mourning after the death of Queen Elizabeth II.
City economists are forecasting a further rise in inflation to 10.2% in August when official figures are published on Wednesday, as the rising price of a weekly shop and sky-high energy bills add to the financial pressure on struggling households. This would mark a modest uptick from the July reading of 10.1%, which was the first time the consumer prices index had risen above 10% since the early 1980s.
The figures come after the Bank of England delayed a decision over a further rise in interest rates from the current level of 1.75% this week, in a mark of respect for the Queen. With businesses, financial institutions and unions cancelling or pushing back major events amid the national period of mourning, the central bank’s rate-setting monetary policy committee will wait until 22 September to act.
Over the weekend it was confirmed that the Queen’s funeral on Monday 19 September will be a bank holiday. While providing an opportunity for the public to pay their respects, the event could bring mixed blessings for businesses.
Rail industry leaders said travel to and from London would be “extremely busy”, urging mourners going to the capital to plan their journeys in advance.
Extra bank holidays can provide a boost to retail sales and hospitality spending. However, additional bank holidays have also led to a fall in monthly output for the economy as a whole, with businesses and factories closing their doors early. Official figures have shown a drop in
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