The UK avoided recession in 2022 as GDP remained unchanged in the final quarter of the year. The International Monetary Fund has singled out the UK as the only developed economy expected to fall into recession in 2023, however, the National Institute for Economic and Social Research estimates the UK will avoid recession with modest annual growth of 0.2%. It expects unemployment to rise slowly and says older workers who left the workforce during the pandemic are likely to return to the workforce to deal with higher living costs. However, the NIESR says high inflation means it will feel like a recession for many people, with up to 7 million people unable to meet all their bills and disposable incomes falling by up to 13% for middle earning households.
Meanwhile the FTSE 100 hit a new all-time high as it passed the previous high water mark from 2018. The index of the UK’s largest companies has benefited from strong profits from the energy sector and the weaker pound has boosted the value of overseas earnings.
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