UK Flirts With Recession as Retail Sales Rise and Hunt Signs Trade Deal

From
November
to
October,
retail
sales
jumped
by
1.3%,
after
being
unchanged
month-on-month
in
October.
October’s
figure
was
revised
from
a
0.3%
fall
in
October.
Markets
were
expecting
a
0.4%
increase
in
November.

Excluding
fuel,
sales
jumped
1.3%
month-on-month
in
November,
picking
up
from
a
0.2%
increase
in
October.
Annually,
non-fuel
sales
rose
by
0.3%
after
falling
by
2.1%
a
month
earlier.

But
the
body
also
reports
revised
UK
gross
domestic
prodcut
(GDP)
figures,
and
the
news
is
not
good.
In
the
third
quarter
of
2023
(July
to
September)
the
ONS
registered
a
0.1%
fall
in
GDP
quarter-on-quarter.
It
had
previously
estimated
growth
was
stagnant.

In
the
second
quarter
of
the
year,
the
economy
witnessed
no
growth
from
the
first
quarter,
revised
down
from
a
0.2%
expansion,
the
ONS
added.

On
an
annual
basis,
however,
GDP
did
grow
0.3%
in
the
third
quarter,
coming
in
below
previous
forecasts
of
0.6%. 

The
news
means
the
UK
could
now
be
in
a
technical
recession,
defined
as
two
consecutive
periods
of
negative
economic
growth,
though
there
is
not
yet
precise
data
to
verify
this. 

Yesterday,
amid
continual
pressure
to
re-establish
Britain
as
a
growth
player
on
the
world
stage,
chancellor
Jeremy
Hunt
signed
a
financial
services
deal
with
Switzerland
aimed
at
easing
UK
firms’
access
to
the
Swiss
market
and
vice
versa.

The
post-Brexit
deal,
based
on
mutual
recognition
of
domestic
laws
and
regulations,
was
signed
by
Hunt
and
his
Swiss
counterpart
Karin
Keller-Sutter
in
Bern.

“It
cements
open
access
for
financial
services
between
our
two
nations
for
decades
to
come,
helping
us
grow
the
economy
and
serving
as
a
blueprint
for
future
agreements
with
other
key
trading
partners,”
Hunt
said.

When
Britain
left
the
EU
it
risked
losing
the
benefits
of
its
former
trading
arrangements
with
Switzerland,
which
were
based
on
Brussels’
rules
despite
it
not
being
a
member
state.

The
new
deal
will
mean
frictionless,
cross-border
provision
of
financial
services
between
the
UK
and
Switzerland
across
areas
such
as
asset
management,
banking
and
investment
services.

“The
UK-Switzerland
Mutual
Recognition
Agreement
is
a
landmark
agreement,”
UK
Finance
chief
executive
David
Postings
said.

“Given
it’s
been
drafted
specifically
for
the
financial
services
sector,
the
market
access
provisions
and
measures
aimed
at
removing
regulatory
barriers
go
much
further
than
those
normally
included
in
trade
deals.

“The
innovative
agreement
sets
an
ambitious
precedent
and
we
hope
it
will
serve
as
the
new
standard
for
future
deals
with
other
financial
centres
around
the
world.”

For
certain
sectors
it
means
that
a
firm
based
in
the
UK
will
be
able
to
serve
clients
in
Switzerland
while
largely
following
UK
rules,
and
vice
versa.

The
Treasury
said
the
deal
will
also
mean
that
the
UK
will
be
exempt
from
a
2024
requirement
for
foreign
insurance
firms
to
establish
a
base
in
the
country
before
serving
Swiss
clients.

By
David
Huges,
Sophie
Wingate,
and
Sophie
Rose,
compiled
by
Morningstar

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