CITY AM – UK to swerve recession as inflation falls
UK to avoid recession despite Bank of England interest rate rises, EY predicts
CITY AM SAYS The UK will avoid a recession despite the impact of the Bank of England’s interest rate hikes, new forecasts from the EY Item Club say.
In its new Autumn forecast, the EY Item Club predicted the UK economy would grow 0.6 per cent over the course of 2023, up from 0.4 per cent growth projected in July.
The economy has been far more resilient to the Bank’s interest rate hikes than many experts predicted thanks to a remarkably strong labour market and the fairly rapid fall in energy prices.
Businesses investment has been significantly stronger than expected and EY expects investment growth across the year to hit 5.9 per cent. Excluding the post-pandemic bounce, this is the fastest rate of growth since 2016.
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