UK set to dodge recession, but big problems remain -CBI | Inquirer Business

UK set to dodge recession, but big problems remain -CBI

/ 09:43 AM June 12, 2023

LONDON – Britain’s economy now looks likely to sidestep recession entirely this year but deep-rooted problems like weak business investment will persist, the Confederation of British Industry trade body said on Monday.

The economy is on course to expand 0.4 percent this year and 1.8 percent next year, the CBI said, compared with its previous forecast for a 0.4-percent contraction followed by growth of 1.6 percent in 2024.

Falling energy prices, the reopening of China’s economy from COVID-19 restrictions and easing supply chain disruptions were the main reasons for the upgrade, the CBI said.

Article continues after this advertisement

Other forecasters like the Organization for Economic Cooperation and Development and International Monetary Fund have also bumped up their growth forecasts for Britain recently.

FEATURED STORIES

“While encouraging, there’s no getting away from the fact that this year will be another tough one for both businesses and households,” CBI lead economist Alpesh Paleja said, noting that the Bank of England looks likely to raise interest rates to a peak of 5 percent by August from 4.5 percent now.

Bank of England raises rates and Bailey promises to “stay the course”

Article continues after this advertisement

“It’s also concerning that the UK is underperforming on many of the areas crucial to our long-term prosperity, such as business investment and trade intensity,” he said.

Article continues after this advertisement

The CBI does not expect business investment – a weak spot for Britain’s economy since the Brexit vote of 2016 – to return to its pre-pandemic level before the end of next year.

Article continues after this advertisement

UK becoming less attractive for investment, manufacturers warn

“Making our business environment more attractive to firms at home and abroad must be front of mind in the months ahead,” Paleja said.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

TAGS: Britain, Business, economy, Energy

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.