Geo-political news
UK economy – The UK economy rebounded slower than expected in May, growing by just 1.8% from the previous month. The growth was described as “disappointing” by economists, who were expecting an expansion of 5% or more. Although disappointing, it brings some light relief from figures posted in March and April, with declines of -6.9% and a record -20.4% respectively. Putting those negative figures into perspective, during the 2008 financial crisis, UK GDP shrank by no more than 1% in a single month.
Jobs data released this week stated that 649,000 people in the UK have now lost their jobs since the start of the lockdown in late March, with job vacancies also disappearing. The unemployment figure remained unchanged between March and May at 3.9%, but experts say that this figure masks the true scale of the crisis, as the number of hours worked fell at the fastest pace on record in the same period, to a record low of 26.6 hours per week.
EU summit – European leaders met in Brussels on Friday to kick off a two day meeting, where they are due to discuss the details of a €750bn pandemic recovery fund, alongside a renewed EU budget for 2021-2027.
The pandemic recovery plan will consist of loans and grants being sent to the countries who are most in need, with the most powerful states, like Germany, agreeing to join a common debt programme to alleviate the economic suffering in the struggling southern and eastern member states. The 27 member states must now decide how and where the money is spent, as well as who should contribute the most, as the bloc suffers through the worst recession in its history
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