UK ‘at risk of recession next year’, thinktank warns

Published

2 years ago

August 9, 2023

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The UK is on course to experience five years of “lost” economic growth and is at risk of a recession next year, according to an economic thinktank.

The National Institute of Economic and Social Research (Niesr) said by 2024 income inequality will have grown, along with unemployment and levels of debt.

Researchers, writing in the thinktank’s latest quarterly outlook, said “elevated housing, energy and food costs” would continue into next year, while gross domestic product (GDP) – a key indicator of a country’s economic output – would likely “barely grow”.

It said GDP was currently 0.5% below the level it was before the pandemic, and would not pass that level for another year – but also cautioned the outlook was “highly uncertain”.

“There are, in fact, even chances that GDP growth will contract by the end of 2023 and a roughly 60% risk of a recession at the end of 2024,” the thinktank warned.

Its last forecast in February predicted that the UK would avoid a recession in 2022 – but said the strain from the cost of living crisis would make it “feel like” one.

Niesr’s outlook is more pessimistic than the Bank of England’s forecasts last week, which came as it raised the base rate for the 14th time in a row.

The Bank suggested a recession was unlikely in the coming years but did imply that the economy will effectively flatline all the way through to 2026.

Its chief economist, Huw Pill, also recently warned that food prices may not fall back to what they were prior to the war in Ukraine.

On UK inflation, Niesr forecast that it will remain above the Bank’s 2% target until 2025, but said it could fall to 5.2% by the end of this year.

Real-terms wages in many UK regions are also expected to be below pre-pandemic levels by the end of 2024, according to the forecasts.

The poorest households will also experience a 17% shortfall in their disposable incomes in 2024 compared with five years earlier, while the richest households will only see a 5% drop, researchers predicted.

Professor Stephen Millard, Niesr’s deputy director for macroeconomic modelling and forecasting, said the “triple supply shock” of Brexit, the COVID pandemic and Russia’s invasion of Ukraine were major factors behind the dire economic outlook.

He said “the monetary tightening that has been necessary to bring inflation down” had also played a role.

Professor Millard added: “The need to address the UK’s poor growth performance remains the key challenge facing policy makers as we approach the next election.”

It comes after chancellor Jeremy Hunt said last week that he was working on plans to get the UK economy back on track.

He told Sky News: “What you’ll see from me in the autumn statement is a plan that shows how we break out of that low growth trap and make ourselves into one of the most entrepreneurial economies in the world.”

UK

Body found in search for missing jogger Jenny Hall

Published

2 hours ago

February 23, 2025

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Body found in search for missing jogger Jenny Hall

A body has been found in the search for 23-year-old runner Jenny Hall.

She was last seen leaving her home in Barracks Farm, County Durham, in her car just after 3pm on Tuesday.

Police said there are not thought to be any suspicious circumstances after a body was found in a very remote area in Teesdale on Sunday morning, five days after she went missing.

“We’re sorry to report that officers searching for missing woman Jenny Hall, have sadly found a body,” Durham Constabulary said in a statement.

“Officers carried out an extensive search alongside specialist partners and have been working around-the-clock to locate Jenny after she went missing on February 18.

“The body was found in a very remote area in Teesdale just after 9.30am today.

“Formal identification has yet to take place. Jenny’s family have been notified and are currently being supported by specialist officers. They have asked for privacy at this devasting time.

“It is not believed there are any suspicious circumstances and a file will be prepared for the coroner.”

A major police search was launched after Ms Hall’s disappearance.

Her car, a red Ford Focus, was found on Wednesday parked on the B6278, near remote moorland between Eggleston and Stanhope.

Mountain rescue teams, specialist drones and sniffer dogs had been combing the Hamsterley Forest and the surrounding areas, where there are a number of running trails, this week.

Digital intelligence officers also carried out extensive inquiries into Ms Hall’s mobile phone, smart watch and running apps.

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Fresh amber warning for rain as Met Office issues alerts for much of UK

Published

2 hours ago

February 23, 2025

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Fresh amber warning for rain as Met Office issues alerts for much of UK

A fresh amber weather warning for heavy rain has been issued by the Met Office – with much of the UK already on alert for high winds and showers.

Northern Ireland, Scotland and the UK’s west coast and the Midlands have yellow warnings for wind on Sunday – meaning the possibility of transport delays and short-term power cuts.

There are also rain warnings in place for several parts of western UK.

The new amber warning has been issued for rain in south and central Wales and is in force from 3pm on Sunday to 6am on Monday.

An amber warning means danger to life from floodwater, homes and businesses are likely to be flooded, and there is a chance some communities will be cut off.

Winds across the west of the UK will increase throughout the morning with gusts up to 70mph in exposed areas, the Met Office said.

Zoe Hutin, a meteorologist at the forecaster, said Sunday is expected to be the “worst day” before conditions improve.

“The wind warning itself for the mainland UK ends at 6pm, but we can expect to continue to see quite blustery conditions even into the evening as the mainland rain itself pushes through.”

She added: “By the time people get up on Monday, we’ll still have some of the residual rain from that front in the far south-east of the country, and quite cloudy across England as well.

“But actually elsewhere, it could be a decent start.”

The Met Office’s yellow weather warnings for much of England and Scotland came into force at 6am and are expected to run until 6pm on Sunday.

A separate yellow warning for Northern Ireland came into force at 3am and runs until 3pm.

People who have noticed some slightly higher temperatures the last couple of days may be dismayed at the latest predictions.

“Through the week, those temperatures are trending back down,” Ms Hutin said.

“And so it will be getting cooler each day, but they will actually just be recovering to around average for the time of year. So it won’t be cold.

“It will just be returning back to where we would expect to be for this time of February.”

UK

Starmer says ‘US is right’ about UK and Europe needing to take more responsibility for defence

Published

2 hours ago

February 23, 2025

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Starmer says 'US is right' about UK and Europe needing to take more responsibility for defence

Sir Keir Starmer has said the United States “is right” about the UK and Europe needing to take more responsibility for defence and security.

The prime minister, speaking at the Scottish Labour conference in Glasgow on Sunday, said he is clear Britain “will take a leading responsibility” in protecting the continent.

“Instability in Europe always washes up on our shores,” he said.

“And this is a generational moment. I’ve been saying for some time that we Europeans – including the United Kingdom – have to do more for our defence and security. The US is right about that.”

He added “we can’t cling to the comforts of the past” as it is “time to take responsibility for our security”.

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Donald Trump sparked an emergency meeting of European leaders this week after he said European NATO members should spend more on defence, while the US should spend less.

Sir Keir has said he will set out a path for the UK to spend 2.5% of GDP on defence, up from the current 2.3%, but has not indicated when that will be.

It is believed he may announce the details when he visits Mr Trump in Washington DC on Thursday, bringing forward the announcement that was expected in the spring when a defence spending review is published.

The prime minister reiterated the UK will “play our role” if required in Ukraine following a peace agreement after he earlier this week said the UK would send troops to be part of a peacekeeping force.

However, his comments caused a row with Germany and Italy who said it was premature to commit to boots on the ground, although France agreed with the UK.

Sir Keir said: “As we enter a new phase in this conflict, we must now deepen our solidarity even further.”

He added: “There can be no discussion about Ukraine without Ukraine.

“And the people of Ukraine must have long-term security.”

This week has seen US officials meet their Russian counterparts in Saudi Arabia to discuss Ukraine – which has been met with indignation by Ukrainian President Volodymyr Zelenskyy as none of his team were invited.

No Europeans were invited either, sparking concern the US is pandering to Vladimir Putin.

Sir Keir has promised Mr Zelenskyy he will make the case for safeguarding Ukraine’s sovereignty when he meets with Mr Trump, who has called the Ukrainian president a dictator.

Mr Trump also said Sir Keir and French President Emmanuel Macron, who will visit the White House too this week, “haven’t done anything” to end the war.