New PM must act as UK economy set for recession this year
With the UK economy set to slip into recession this year, the British Chambers of Commerce (BCC) has warned that the new Prime Minster will need to take immediate action to protect businesses and livelihoods.
The BCC is now forecasting a recession for the UK economy, with three consecutive quarters of contraction between Q2 and Q4 in 2022.
Annual expectations for GDP growth also continue to decline, with 3.3% forecast for 2022, significantly below the 7.4% growth recorded in 2021.
Businesses and consumers will continue to face exceptionally high costs as rampant inflation spirals upwards in late 2022. The BCC now expects the Consumer Price Index (CPI) inflation rate to reach a peak of 14% this year.
The BCC also warned that business investment is set expected to be ‘anaemic’, growing at 2.7% in 2022.
Alex Veitch, Director of Policy at the BCC, said: ‘Our latest quarterly economic forecast will not be of any comfort to either consumers or businesses. The extreme inflationary pressures already present are only likely to increase as we head towards Christmas, with the UK economy already thought to be in recession. Tackling these pressures must be at the top of the new Prime Minister’s inbox.’