UK economy ‘will shrink for two years as eurozone and US grow’

Adam Posen, president of the Peterson Institute, spent three years on the Bank of England’s monetary policy committee. Photograph: Chip Somodevilla/Getty

The UK economy will shrink this year and in 2024, according to a report by a leading US thinktank that said stubborn inflation and a shortage of workers would damage the prospects for growth more than most analysts expect.

The Washington-based Peterson Institute for International Economics (PIIE) said a drop in GDP this year of 0.3% would be followed by a fall of 0.2% next year while the eurozone and the US were on course for growth this year and next.