The British economy shrank unexpectedly for the first time since 2012 in the second quarter, dragged down by a slump in manufacturing just as Prime Minister Boris Johnson prepares to leave the European Union with or without a divorce deal. GDP contracted at a quarterly rate of 0.2% in the three months to June, below all economists’ forecasts in poll that had indicated a flat reading. The Pound fell to a 31 month low against the USD and close to a 24 month low against the Euro.
Manufacturing was the biggest contributor to the overall contraction, slipping 2.3% quarter-on-quarter in the three months to June. That figure was the biggest quarterly fall since the first three months of 2009.
It was also reported on Friday that Boris Johnson sent a letter to all civil servants to say that said: “Preparing urgently and rapidly for the possibility of an exit without a deal will be my top priority”. It also emerged that Downing Street had cancelled all leave for government advisers until 31 October, increasing speculation that the government is planning a snap election in the aftermath of a no-deal Brexit.