UK to slip into recession before 2024 end? Here's what we know

livemint.com:

There is a high possibility that the next UK election will be fought against the backdrop of a recession. The National Institute of Economic and Social Research recently predicted a 60% possibility of recession by the end of 2024 and highlighted the widening of the gap between the prosperous and less well off parts of Britain. The forecast also echoes recent Bank of England assertions that the GDP would remain below pre-pandemic levels “in the medium term." “Despite continuing to expect the United Kingdom to steer clear of a recession in 2023, GDP is projected to grow barely by 0.4 per cent this year and by 0.3 per cent in 2024, with the outlook remaining highly uncertain.

There are, in fact, even chances that GDP growth will contract by the end of 2023 and a roughly 60 per cent risk of a recession at the end of 2024," the report said. The projections shared by the thinktank also counter the ruling Conservative Party's promise to “level-up" the country’s regions and reduce inequality. With the UK now headed for five years of lost economic growth, the Rishi Sunak-led government faces a complicated re-election bid in January 2025.

Gross domestic output is unlikely to return to its pre-pandemic level before 2024. In the first quarter of 2023, the UK's GDP had been 0.5% below the level of GDP before the pandemic. The NIESR forecast said that it would not pass this level “until the third quarter of 2024" and also forecast inflation continually above target until 2025.