Britain’s economy will shrink in the second quarter as the squeeze on living standards, the end of free Covid testing and an extra public holiday hit activity, according to new projections by Bloomberg Economics. Senior U.K. Economist Dan Hanson expects output to contract by 0.2% in the three months through June, in contrast to consensus forecasts for growth of 0.2%. He expects a recession to be avoided, however, as the economy recovers in the third quarter. The temporary dip could “make the Bank of England think twice about lifting rates beyond May,” Hanson said, as “concern about inflation gives way to worries about growth.” His base case is for the central bank to deliver a fourth straight rate hike next month, and markets are pricing in further increases in the second half after inflation hit a 30-year high of 7% last month. The U.K. economy grew 1.3% in the […]