UK 'likely to avoid technical recession in 2023', says think tank

09 Feb 2023

Think tank the National Institute of Economic and Social Research (NIESR) has suggested that the UK economy will avoid a 'technical recession' this year, but low GDP growth and contractions in real personal disposable income will have adverse effects on many households.

Research published by the NIESR stated that the cost-of-living crisis is having a lasting effect on UK households, and that inflation continues to be a concern in 2023, 'both at the macroeconomic and household level'.

Corporation tax rises are likely to reduce investment in the UK economy and income tax threshold freezes will lower personal disposable income, the NIESR warned.

The NIESR also said that public finances 'remain vulnerable to interest rate rises' in addition to 'further shocks' to the economy.

Additionally, the think tank forecasts a slow rise in unemployment in 2023, and that the participation rate for the working-age population will return to its pre-COVID level over the course of the next few years, with workers aged between 50 and 64 returning to the labour force.

The research can be found here.