The “unprecedented” impact of rising inflation means there is a “real chance” of a recession later this year, the British Chambers of Commerce has warned.
Inflation has hit its highest level in 40 years amid the deepening cost of living crisis.
The rate shot up to a fresh record high of 9 per cent last month, up from 7 per cent in March, following a £700 increase to energy bills.
Suren Thiru, head of economics at the British Chamber of Commerce, said: “The scale at which inflation is damaging key drivers of UK output, including consumer spending and business investment, is unprecedented and means there is a real chance the UK will be in recession by the third quarter of the year.”
He called for chancellor Rishi Sunak to reverse the rise in National Insurance Contributions and cut VAT on business energy bills to 5 per cent.
It comes after Andrew Bailey, governor of the Bank of England, warned of “apocalyptic” food prices in the months ahead due to the war in Ukraine.
