UK business lobby growth sees 2023 growth slowing to 1% and inflation weighs on economy.
UK growth will be slower than previously expected this year and next as consumers move into a 'household recession, the nation's leading business lobby says Monday. The CBI downgraded its growth outlook for 2022 to 3.7%, with growth in 2023 now seen at just 1%, down from a previously seen 3.0%.
The downgrade has been driven by the sharp pick-up of inflationary pressures, CBI director general Tony Danker told reporters, saying consumers were retrenching and paring back on concessionary spending. However, the CBI said the UK should just avoid a technical recession -- two consecutive quarters of negative growth across the entire economy -- as strong business investment was offering some underpinning.
The warnings from the CBI come in the week when the Bank of England meet and look set to raise rates for a 5th consecutive meeting, as policymakers look to slow inflation currently running at 9%. The CBI sees inflation slowing very modestly over the summer, peaking again in October at 8.7%. If then sees a gradual decline, eventually returning to the BOE's target level in Dec 2023.