Powered by MOMENTUM MEDIA
subscribe to our newsletter

UK headed for 'shallow recession': NAB

The UK is likely to enter a brief 'technical recession' as the country adjusts to the realities of Brexit, says NAB – but there will be "relatively little" impact on global growth.

In its latest global growth forecasts, NAB Group Economics has revised down its UK year-average GDP growth forecasts in the wake of the UK vote to leave the European Union.

The short-term result of Brexit is likely to be a "shallow" or technical recession (ie, two quarters of negative GDP growth), said NAB.

"By itself, a UK slowdown has relatively little impact on global growth," said the report. "The main risk to global growth comes from the extent to which financial market disruptions and uncertainty also impact other countries, in particular the rest of Europe."

In a scenario modelled by NAB, a "spillover" to Europe would lead to a peak decline in world GDP of 0.5 per cent relative to the baseline scenario.

Advertisement
Advertisement

PROMOTED CONTENT


"The impact on Australia is small; the ‘spillover’ scenario generates a depreciation of the Australian dollar which limits the impact on real GDP growth," said NAB.

"That there would be some impact on the EU outside of direct trade impacts would be expected.

"While it was the UK’s decision to leave, the rest of the EU now (involuntarily) faces the prospect of being in a smaller trading bloc, with some of the same negative consequences," said the report.

[Related: Major bank's 'torturous and expensive journey']

UK headed for 'shallow recession': NAB
mortgagebusiness

Latest News

The chairman of the financial services regulator has resigned from his position, effective immediately. ...

Refinancing settlements for the first nine months of the calendar year 2020 are up 27 per cent on last year’s volumes, having peaked in Ju...

The Tasmanian-based lender has seen a 43 per cent rise in settlements in the first quarter of the financial year, driven by strong demand fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.