30 June, AtoZForex – Following UK’s decision to leave the EU, UK economy has been under the market’s spotlights. Today, change in the inflation adjusted value of all United Kingdom goods and services has come in line with expectations at 0.4% but below its 3 months average of 0.57% amid Brexit implications
UK GDP post Brexit
Goldman Sachs has estimated that the UK will likely enter a “mild recession” by early 2017, following its vote leave the EU.
The investment bank has also downgraded UK’s global growth forecast by 0.1% to 3.1% in 2016.
More importantly, UK GDP is expected to take a 2.75% hit in the next 18 months from the cumulative effects of “increased uncertainty and deteriorating terms of trade,” Goldman Sachs’ economists Jari Stehn, Jan Hatzius and Karen Reichgott projected.
Goldman’s forecast for UK GDP growth in 2016 was 1.5%, a 0.5% lower than its previous forecast. While the investment bank’s prediction for UK economic growth next year is a mere 0.2%, a 1.8% decline from its prior UK economic forecast.
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