We partied for June’s jubilee, but a winter recession won’t be an easy ride

theguardian.com:

Rewind to this time last year and the UK economy was accelerating out of the biggest slump in 300 years. The year-on-year growth rate was 8.7% and there was a sense that the worst of the pandemic was over.

China had reopened its doors to the world and inflation was falling as commodity prices – from copper and oil to wheat and timber – began to tumble.

This week the outlook is very different, reflecting the high cost of the war ravaging Ukraine and the supply chain blockages that can be traced back to China’s return to sporadic lockdowns of industrial centres and ports, blocking global supply chains.

Official figures on Friday showed the UK economy contracted by 0.1% in the three months to June, and the Bank of England expects a long recession to begin in October.

Part of the decline was attributed to the two bank holidays that denied employers the usual number of working days in June. The Bank of England believes the jubilee bank holidays were significant and will be offset by a symmetric bounceback in the third quarter, before a downturn gets fully under way.

Data on the state of the labour market, inflation and retail sales will appear over the coming days and is expected to confirm the Bank’s view that economic output at the moment is flat, and that a full-blown recession will start later in the year.

On Tuesday, job figures are expected to show that a shortage of workers has kept the labour market tight. Unemployment will remain low and vacancies will stay near record highs. Wage growth is forecast by City analysts to have stabilised since May at 6.2%, including bonuses.

The government will attempt to cast these figures as good news that reveals how government policies have supported employment.

But the jobs market is still