The UK economy could enter recession with 60 per cent risk by the end of 2024

It has been reported that the risk of the British economy going into recession by the end of 2024 is 60 per cent and income inequalities may increase in this period when general elections are planned in the country.

According to analysis by the National Institute for Economic and Social Research, known as Britain’s oldest independent economic research institute, the tightening of monetary policy to reduce inflation caused by Brexit, the Kovid-19 outbreak and the war between Russia and Ukraine negatively affected the British. economy.

With the impact of these developments, although the British economy is expected to grow by 0.4 percent this year and 0.3 percent in 2024, uncertainties regarding the economic outlook remain high.

HIGH RISK OF CONTRACTION

Depending on the uncertainties at hand, the economy is likely to contract by the end of this year and is forecast to enter a recession by the end of 2024 with 60 percent risk.

Inflation is expected to fall to 5.2% by the end of this year and 3.9% by the end of 2024, but remain above the forecast level of 2% through 2025. The risk that core inflation, which is currently 6.9 percent, continues to be high, the probability that headline inflation will remain above expectations increases.

INCREASING INTEREST RISKS GROWTH RISKS

While interest rates are expected to peak with the Bank of England policy rate rising from the current level of 5.25 percent to 5.50 percent, household vulnerabilities are forecast to increase due to low economic growth and stagnant production.

It is expected that until the end of 2024, when the general elections are scheduled, salary levels in the country will remain below those prior to Covid-19 and the polls will be held at a time when income inequalities are increasing. (AA)