The British Chambers of Commerce (BCC) estimate that the UK economy will remain in recession for much of 2023 before a recovery can be seen, although they indicate that inflation may fall.
According to the Chambers, the British economy will not grow again until the last quarter of 2023, while inflation, which is currently at 10.7%, may fall to 5% in the last three months of next year.
Although there will be signs of recovery at the end of 2023, the recovery will be weak because business investments, exports and household consumption will be low, it adds.
The BCCs stress that the economic contraction in 2023 will be due to the fall in consumer spending (due to the increase in energy costs), and the rise in the cost of mortgages.
The BCC’s policy director, Alex Veitch, noted that the Chambers’ investigation “has shown that business confidence has fallen for months” and that “few companies will be willing to invest when faced with a wall of higher prices, interest rates and taxes.”