BofA Sees UK Recession in 2023 on Higher Inflation and Rates

Surging energy to lift inflation to 12.6%, rates peak at 2.75%
Tax cuts under new leader push up inflation and interest rates

Closed-down businesses in Bradford, UK.
Photographer: Carolyn Mendelsohn/Bloomberg

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By Philip Aldrick

July 22, 2022 at 10:48 AM UTC

This article is for subscribers only.

Britain will fall into recession next year as higher inflation, aggressive interest-rate rises and weaker consumer demand hit growth, Bank of America’s UK economist Rob Wood predicts.

For 2023 as a whole, Wood sees output shrinking 0.4%, a downgrade from his earlier forecast for 0.2% growth. That is worse than the Bank of England’s May forecast for a contraction of 0.25%.