The nation headed into 2022 with optimism for the economy, but hopes of a bumper year of growth unrestrained by Covid restrictions were dashed as the cost-of-living crisis took centre stage. But if we were hoping 2023 would be better, unfortunately experts are predicting it will be the "year of recession".
Samuel Tombs at Pantheon Macroeconomics said GDP is likely to fall by 1.5% year-on-year in 2023, with no sign of a recovery until early 2024. With rates ending 2022 at 3.5% – a 14-year high – this will further hold back consumer spending, hitting some four million mortgage borrowers who are due to refinance next year, according to the Bank of England.
But the expected recession will also help rein in inflation, which will allow the Bank to take its foot off the pedal. Mr Tombs said: “We expect the MPC to raise Bank Rate to 4% in February, but then to stand pat in March.
