The Confederation of Business Industry (CBI) released a gloomy forecast for the UK economy, predicting it to shrink by 0.4% in 2023.
Against the backdrop of high inflation, rising prices and low levels of investment, the CBI warned against long-term growth implications if action is not readily taken.
Moreover, the CBI has revised its June forecast, which predicted 1% growth over 2023, and instead claims that the UK is unlikely to see gross domestic product (GDP) return to pre-COVID levels until mid-2024.
The current 3.6% rate of unemployment is also expected to rise, predicted to peak at 5% in late 2023 and early 2024.
“We will see a lost decade of growth if action isn’t taken. GDP is a simple multiplier of two factors: people and their productivity. But we don’t have people we need, nor the productivity”, said the Director General of the CBI, Tony Danker.
The CBI forecast is in line with the Organisation for Economic Co-operation and Development (OECD), who foresee the British economy to be the worst performer out of all European countries in 2023, aside from Russia.
Others predict an even bleaker picture, with the British government’s Office for Budget Responsibility expecting a 1.4% contraction of the UK economy in 2023.
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