British economy stagnating due to high inflation - impact on GDP and growth forecasts

British economy stagnating due to high inflation - impact on GDP and growth forecasts

According to a report by www.tagesschau.de, the British economy stagnated in the third quarter due to high inflation. The inflation rate of 6.7 percent is well above the target of two percent and is the highest among the large industrialized countries. The British central bank has raised its key interest rate to 5.25 percent and only expects minimal growth of 0.1 percent for the fourth quarter.

High inflation and high interest rates have a dampening effect on the economy and economic growth. Loans for investments have become more expensive and spending by consumers, companies and the government has fallen. The central bank's forecast for 2024 is that there will be stagnation and only 0.25 percent growth in 2025.

Higher interest rates and rising inflation are dampening investments and consumer spending. This can lead to a slowdown in economic growth and trigger a recession. The British government and the central bank must take action to combat inflation and stimulate economic growth. Otherwise, the UK economy risks falling into a long-term recession.