BCC economic forecast: A long way to recovery after more than a year of recession
UK Economic Outlook :
- The British Chambers of Commerce (BCC) predicts that the economy will not return to growth until the fourth quarter of 2023.
- UK inflation is expected to be 11.0% in Q4 2022 and to slow to 5% in Q4 2023.
- The economy will grow in 2024, but the recovery will be weak as business investment, exports and household consumption remain low.
GDP heading for a five-quarter contraction
In the immediate future, the BCC is now forecasting a five-quarter recession for the UK economy, which began in the third quarter of 2022. The annual GDP growth forecast for 2023 is now -1.3%, broadly in line with the OBR and Bank of England forecasts. However, unlike the Bank of England, the BCC expects the economy to grow in 2024, but at 0.7%, around half the OBR’s forecast.One of the main factors contributing to the contraction of the economy in 2023 is the sharp fall in household spending as consumers face rising energy costs, falling real wages, a freeze on tax allowances and rising mortgage payments. The poor outlook for the global economy means that exports are also likely to decline, although they are outweighed by a sharper decline in imports.
Source : BCC.