Britain will avoid a recession this year, according to new forecasts, as energy prices retreat and supply chain disruption abates.
But that doesn’t mean everything will be rosy, as stubbornly high levels of inflation and correspondingly high interest rates continue to pile on the pressure.
Accountancy firm KPMG no longer expects a recession in the UK this year, forecasting that GDP will rise by 0.3%. The CBI, which previously projected a decline of 0.4% in GDP, now expects it to expand by 0.4%. Both expect growth to pick up next year, with KPMG forecasting a 1.1% rise and the CBI projecting an increase of 1.8%.
Yael Selfin, chief economist at KPMG UK, said: “We’ve seen a slightly stronger momentum for the UK economy but risks are still elevated on the downside. A stickier inflation will see monetary policy tightening even further, increasing the risk of unwelcome side effects among other potential headwinds.”
