Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK to avoid recession but inflation won’t return to Bank of England target until end of next year

by April 28, 2023
April 28, 2023
UK to avoid recession but inflation won’t return to Bank of England target until end of next year

Britain is poised to dodge a recession this year, but inflation will not return to the Bank of England’s two per cent target until the end of next year, new forecasts out last night revealed.

The fresh projections from consultancy PwC add to the growing body of organisations who have canned their prediction that the country was on course to suffer a tough economic slump this year.

PwC now thinks gross domestic product – which measures the value of all goods and services produced in the UK – will edge 0.1 per cent higher this year, still very poor but better than previously expected.

Bank of England officials have dropped their recession prediction, as have experts at Britain’s official forecaster, the Office for Budget Responsibility.

“Our analysis suggests the UK has very much passed through the eye of the inflationary storm compared to last year, and is showing signs of a return to some sort of normality this year,” Barret Kupelian, senior economist at PwC, said.

However, there is a risk high inflation – that has raided families’ budgets for more than a year and is still in the double digits at 10.1 per cent – could persist despite bank governor Andrew Bailey and co’s efforts to tame it with aggressive interest rate rises.

The rate of price increases in the UK is tipped to stay above the Bank’s two per cent target until 2024, according to PwC.

It has been above that goal since the summer of 2021 despite the Bank raising borrowing costs 11 times in a row to 4.25 per cent.

Bailey and the rest of the Monetary Policy Committee (MPC) are anticipated to lift rates again on 11 May by 25 basis points and could even kick them to a peak of five per cent, markets reckon.

While inflation will fall rapidly this year, mainly due to a sharp reduction in international energy prices, it does not mean households will be left feeling wholly better off.

PwC calculates that since 2021, UK average prices will have climbed a fifth by the end of their forecast period.

When inflation drops, it doesn’t mean prices are falling. Instead, it means the rate at which prices are increasing is slowing.

“While the headline CPI rate will fall, prices will cumulatively be one fifth higher by the end of next year compared to the start of 2021. This will inevitably affect those on lower incomes, or who have seen smaller wage growth, significantly more than others and will have divergent impacts on consumer spending patterns in a highly polarised recovery,” Kupelian said.

Although avoiding a recession, the UK is also on track to repeat its sluggish economic performance in the years after the 2008 financial crisis, with PwC calculating it will only reach 1.6 per cent in 2025.

That will put the country far behind its G7 peers, PwC said.

Read more:
UK to avoid recession but inflation won’t return to Bank of England target until end of next year

0
FacebookTwitterGoogle +Pinterest
previous post
Over 50s and retirees want to work more, so long as it’s flexible
next post
Wikipedia will not perform Online Safety Bill age checks

You may also like

Electric Car Battery Breakthrough Could Ease Range Anxiety

June 19, 2024

Jacob Zach Winsett: From Farm Roots to the...

June 2, 2025

Reeves faces fiscal rule warning as OECD slashes...

June 3, 2025

NatWest limits cryptocurrency transfers over scam fears

March 15, 2023

Companies more confident on hiring, says Recruitment and...

July 26, 2023

HMRC under fire as thousands of ‘bogus’ Chinese...

December 11, 2024

Newcleo to raise £900m to build fleet of...

March 20, 2023

£10.5m funding deal accelerates next stage of growth...

December 4, 2023

Thomas Flohr Offers One-of-a-Kind Wellness Program for VistaJet...

January 26, 2024

Britain falling behind with full-fibre broadband roll out

December 16, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved