Britain’s economy will almost certainly shrink by 0.4% next year as inflation remains high and companies hold back on investment, with depressing implications for long-term growth, the trade industry confederation forecast on Monday.
CBI Director General Tony Denker said, “The UK is suffering a crippling inflation – with rocket inflation, negative growth, falling productivity and business investment. Companies see potential opportunities for growth but … headwinds will put them off investing in 2023.” Gotta stop.”
The CBI’s forecast marks a sharp decline from its previous forecast in June, when it predicted 1.0% growth for 2023, and calls for gross domestic product (GDP) to return to its pre-COVID level by mid-2024. Does not expect to return to the level.
Britain has been hit hard by a jump in natural gas prices following Russia’s invasion of Ukraine, as well as an incomplete labor market recovery following the COVID-19 pandemic and persistently weak investment and productivity.
The CBI said unemployment would rise to 5.0% in late 2023 and early 2024, from 3.6% at present.