Mark Beresford Smith
Outlook for the UK economy in 2023: a ‘getting-better’ sort of year
The latest economic update from Mark Berrisford-Smith, Head of Economics, Commercial Banking, HSBC UK.
The economic recession is expected to last throughout the first half of 2023. But it will be short and mild by comparison with past episodes. Sluggish growth will resume once the rate of inflation is back in line with, or below, earnings growth.
Businesses will face increased financial stress, especially in the first half of 2023, though the rate of business failures should remain below the levels seen in 2008-09. Small businesses in the retail and hospitality sectors will be especially vulnerable, while weak demand and higher borrowing costs will adversely affect trading conditions for businesses involved in the housing market and the motor trade.
Inflation has peaked, but the road back to the sort of rates seen during much of the past 30 years will be a long one. The Bank of England is set to raise Bank Rate once more in February, after which HSBC expects that it will be left at 3.75% until at least the end of 2024.
To read the full forecast, click here.