UK to Enter Recession Before End of Year, British Chamber of Commerce Says

Rising inflation and the energy crisis will remain at the top of the agenda for the country's new Prime Minister, whose name will be announced on September 5.

The United Kingdom will enter a recession before the end of this year, the British Chamber of Commerce (BCC) said in its latest forecast, adding that growth is also expected to be weak into 2023 and 2024.

The BCC expects the UK economy to record three consecutive quarters of contraction - which falls under the definition of a recession, in 2022, according to their forecast. It also puts unemployment at 3.8% this year and at 4.1% in 2023 and 2024.

Inflation may peak at 14% by the end of this year, the BCC says, falling to 5% before the end of 2023. The BCC echoes the Bank of England's 2% target for inflation in the fourth quarter of 2024.

Unlike the Bank of England, the BCC, however, expects the economy to grow next year, albeit at a very low level of 0.2%. In 2023, it says, a slight increase to 1% should be expected.

According to Alex Veitch, director of policy at the British Chambers of Commerce, "tackling these pressures must be at the top of the new prime minister's inbox when they take up their position next week."

The forecast comes at a time when the Tory leadership race in Britain is nearing its end, with either current Foreign Secretary Liz Truss or ex-Chancellor Rishi Sunak to succeed Boris Johnson at the post of Prime Minister on September 5.