Chancellor Javid says he is ‘not expecting a recession’
Chancellor of the Exchequer Sajid Javid said he is not expecting there to be a recession.
The UK’s economy shrank for the first time since 2012 in the second quarter of this year, as the manufacturing and construction sectors both slumped.
Gross Domestic Product (GDP) decreased by 0.2% between April and June, according to figures released on Friday by the Office for National Statistics (ONS).
The technical definition of a recession is two consecutive quarters of negative economic growth.
Mr Javid said the reason for “volatility” was uncertainty about Brexit, which could be resolved by leaving the EU on October 31.
Asked if the growth figures signalled the UK was heading towards a recession, Mr Javid told Channel 4 News: “I don’t accept that single second.
“I’m not expecting a recession, there is not a single leading forecaster out there that is expecting a recession, the independent Bank of England is not expecting a recession.
“And you know why they’re not? It’s because the fundamentals are strong, that’s the first thing.
“Our economy since 2010 because of the hard work of the British people has grown by 19% and we have more people employed than ever before.”
He added: “The reason we are seeing volatility in numbers – higher results in the first quarter, lower in the second quarter – the reason we’re seeing this is because businesses are trying to work around Brexit and there’s too much uncertainty.
“The way to end that uncertainty is to make sure that we leave as planned which is (on) October 31.”
He continued: “When you look at the growth forecast for the UK for this year, the IMF forecast that we will grow faster than Italy, than Germany, than Japan, they forecast we would grow at the same rate as France.
“But what is most important to me, especially as Chancellor, is that our economy remains strong and we are actually, in terms of fundamentals, one of the strongest economies in the developed world.”