The International Monetary Fund (IMF) predicted this week that the UK is set to be one of the worst-performing economies this year when compared to other G20 economies. Despite the UK topping the G7 countries in 2022.
It’s expected our economy will shrink by 0.3% this year, however, forecasters in January did predict the UK economy would suffer a 0.6% downturn which now seems unlikely.
Chancellor Jeremy Hunt comments on the IMF prediction stating for the BBC that “our IMF growth forecasts have been upgraded by more than any other G7 country. He continued “By sticking to the plan, we will more than halve inflation this year, easing the pressure on everyone.”
The shrink in the UK economy is said to be due to high gas prices, interest rates and a slow trade performance, which we have experienced as an SME business during Quarter 3 of last year.
We also found continuous changes to the macro-environment including the Queen’s sad passing and a succession of Prime Ministers were making consumers cautious.
However, we are hopeful for a good 2023, as we start to see signs of growth in the property market. It’s also important to note that forecasters, such as the IMF can be wrong. Not one can really predict the future. A lesson perhaps will have all taken from COVID.
Therefore, in conclusion, we tend to agree with the forecasters who consider a recession in the UK this year unlikely.