The UK is likely to have avoided a 2022 recession thanks to the “surprise economic growth” of 0.1% in November, says the Resolution Foundation.
But they also warn that “the risk of recession still looms large” as the Bank of England and the Office for Budget Responsibility both forecast the economy will shrink in the first half of 2023.
Resolution also points out that family incomes are still shrinking, with typical household disposable incomes on track to fall by 7% – equivalent to £2,100 per household – over this financial year and the next one.
James Smith, research director at theResolution Foundation, explains: “Surprise economic growth in November – driven by the UK’s dominant services sector – means Britain has likely avoided a rapid return to recession in 2022.
“But while GDP may not have been shrinking, household incomes certainly were – and are – as families experience a deep living standards downturn.”