• Swindon & Wiltshire News
• Thursday March 9 2023
• Author Name: Peter Davison

UK economy will shrink in 2023 before rebounding, says British Chambers of Commerce

The UK economy is on course to shrink less than feared this year and avoid the two quarters of negative growth which mark a technical recession, according to new figures released by the British Chambers of Commerce.

The business organisation forecast a decline in GDP by 0.3 per cent this year – a smaller fall than its previous forecast of 1.3 per cent – before returning to growth in 2024.

But the recovery will remain weak with predicted growth for 2024 revised down, the organisation warned.

Meanwhile it expects inflation will slow to five per cent by Q4 2023.

The BCC said its expectations had been revised upwards due to a more resilient economic performance at the end of 2022, with household spending holding well and and stronger than expected exports.

Alex Veitch, director of policy at the British Chambers of Commerce, said: “Although the economy should now avoid a technical recession, the stark reality is that businesses face a very difficult year ahead.

“With the Government having little fiscal headroom for the Spring Budget, it is vital it spends the money it has got wisely.

“Businesses tell us they are most concerned about the difficulties in recruiting staff, paying their energy bills and rising taxes.

“We know we have a tough year ahead and there is currently little incentive for firms to risk ploughing their dwindling cash reserves or fresh loans into new projects.

“But unless we unlock investment into growth areas of our economy, then the UK will get left behind by our competitors.

“The Chancellor must show more faith in the ability and talent of our businesses. If he backs them, by acting on childcare to ease staff shortages and helping them manage their energy costs, then the UK economy could still prosper.”