UK heading towards five years of lost economic growth

Think tank: National Institute of Economic and Social Research (NIESR)

Author(s): Various authors

August 9, 2023

This report from UK think tank NIESR provides a quarterly economic forecast of the UK economy.

Despite continuing to expect the United Kingdom to steer clear of a recession in 2023, GDP is projected to grow barely by 0.4 per cent this year and by 0.3 per cent in 2024, with the outlook remaining highly uncertain. There are, in fact, even chances that GDP growth will contract by the end of 2023 and a roughly 60 per cent risk of a recession at the end of 2024. This means The UK is on course to experience five years of lost economic growth, the longest since the aftermath of the Global Financial Crisis. The Low economic growth and stagnant productivity is increasing the financial vulnerability of households in the bottom half of the income distribution and the incidence of destitution at the poorest end. Our projections for the General Election year of 2024 suggest that inequalities of income and assets will grow, with little real income growth for many, low or no savings, higher debt, as well as elevated housing, energy and food costs