60% chance UK economy will enter recession in 2024

This is according to new forecasting published by the National Institute of Economic and Social Research (NISER). The thinktank reported that UK GDP is currently 0.5% below the level seen before the pandemic, with it suggesting it will not pass this level until the third quarter of 2024.

Overall, GDP is projected to grow barely by 0.4% this year and 0.3% in 2024. Meanwhile, inflation is forecast to remain continually above the two percent target until 2025 – with it expecting it to fall to 5.2% by the end of 2023 and 3.9% by the end of 2024.  

It also found that low economic growth and stagnant productivity will increase the financial vulnerability of households in the bottom half of the income distribution, resulting in NISER’s 2024 general election projections suggesting inequalities of income and assets with little income will growth for many, low or no savings, higher debt – as well as elevated housing, energy and food costs.  

As a result, the shortfall in the real disposable incomes of households in the bottom of the income distribution is set to reach some 17% in the 2019 to 2024 period. In addition to this, regional real wages are expected to be below pre-pandemic levels by the end of 2024 – namely in the east and southeast of England, as well as the west midlands where wages are projected to be about five percent lower than in 2019.

Meanwhile, those available for work is expected to continue to grow – with the unemployment rate reaching 4.7% in 2024, peaking its “natural rate” of 5.1% by 2026.