The National Institute of Economic and Social Research said the country is on course to experience five years of “lost” economic growth. It said the “triple shocks” of Brexit, COVID and the war in Ukraine had all contributed to the dire forecast.
The UK is on course to experience five years of “lost” economic growth and is at risk of a recession next year, according to an economic think tank.
The National Institute of Economic and Social Research (Niesr) said by 2024 income inequality will have grown, along with unemployment and levels of debt.
Researchers, writing in the think tank’s latest quarterly outlook, said “elevated housing, energy and food costs” would continue into next year, while gross domestic product (GDP) – a key indicator of a country’s economic output – would likely “barely grow”.
It said GDP was currently 0.5% below the level it was before the pandemic, and would not pass that level for another year – but also cautioned the outlook was “highly uncertain”.
“There are, in fact, even chances that GDP growth will contract by the end of 2023 and a roughly 60% risk of a recession at the end of 2024,” the think tank warned.
Its last forecast in February predicted that the UK would avoid a recession in 2022 – but said the strain from the cost of living crisis would make it “feel like” one.
Niesr’s outlook is more pessimistic than the Bank of England’s forecasts last week, which came as it raised the base rate for the 14th time in a row.
The Bank suggested a recession was unlikely in the coming years but did imply that the economy will effectively flatline all the way through to 2026.
Its chief economist, Huw Pill, also recently warned that food prices may not fall back to what they were prior to the war in Ukraine.
Source: https://news.sky.com/story/uk-at-risk-of-recession-next-year-think-tank-warns-12935863