UK heading for recession later this year as inflation set to hit 14%

Figures from the British Chambers of Commerce suggest the country is set to experience a long, grim economic winter.

UK heading for recession later this year as inflation set to hit 14% according to latest predictions iStock

Experts believe the UK will slide into recession this year amid a deteriorating economic outlook.

The British Chambers of Commerce (BCC) has revised its prediction for GDP growth for 2022 down to 3.3%, with inflation set to hit as high as 14% in the final quarter of the year.

It comes just a month after the Bank of England predicted a year-long recession starting this winter against the backdrop of a skyrocketing cost of living standards and plummeting household incomes.

Further figures by the Scottish Retail Consortium (SRC) revealed footfall on high streets was down more than 14% on pre-Covid levels.

Energy regulator Ofgem revealed and 80% hike in household gas and electricity bills to £3,549 in October last week.

Another grim forecast suggested that could reach as high as £7,000 by April next year.

The BCC is now forecasting a recession for the UK economy this year, with negative economic growth for Q2, Q3, and Q4.

Growth fell from 3.5% in Q2, the BCC added.

Bank of England bosses set the base interest rate at 1.75%, up from 1.25% previously – the sixth increase in a row in a bid to curtail runaway inflation.

Retail activity improved slightly on July’s figures, but was down by 14.8% in August compared to levels in 2019.

The SRC said the figures were a “worrying trend”.

Director David Lonsdale added: “Despite the improvement, visits to stores remain well down on pre-pandemic levels and Scotland continued to lag the 12 other parts of the UK surveyed for a fourth month in a row.

“That’s worrying given inflationary headwinds and the likely impact on consumer sentiment and spending power, more so in the lead-up to what is traditionally the crucial golden trading quarter for the industry in the final months of the year.”

STV News is now on WhatsApp

Get all the latest news from around the country

Follow STV News
Follow STV News on WhatsApp

Scan the QR code on your mobile device for all the latest news from around the country

WhatsApp channel QR Code