(MENAFN) The British economy might reduce 0.4 percent in 2023 as inflation stays high and firms put investment on hold, the Confederation of Business Industry (CBI) cautioned on Monday.
Based on the document, the UK has already fallen into a “short and shallow” recession that will leave business investment 9 percent below 2019 levels and productivity 2 percent below its pre-pandemic trend at the end of 2024. Persistent weak productivity and business investment “doesn’t bode well for the country’s potential to grow,” it added.
Inflation in the nation, which reached a 41-year high of 11.1 percent in October, was expected to stand at 6.7 percent in 2023 and 2.9 percent in 2024.
The CBI expects the UK to suffer the second worst slump among major economies, following Germany.
“Britain is in stagflation – with rocketing inflation, negative growth, falling productivity and business investment,” CBI Director-General Tony Danker made a statement. “Firms see potential growth opportunities but a lack of ‘reasons to believe’ in the face of headwinds are causing them to pause investing in 2023,” he clarified.
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