Goldman Warns of Recession for UK

1 min read

Goldman Sachs expects the UK economy to enter recession from the fourth quarter this year.

In a research note published today, Goldman Sachs economists stated that they expect GDP in the UK to contract by around 1.0 percent by mid-2023, while they revised their growth expectations for the whole of 2023 from 1.1 percent to 0.6 percent contraction.

In the research note prepared by economists led by Sven Jari Stehn, “Concerns about cost of living pressures in the UK continue to intensify, supported by the worsening energy crisis. Real consumption is still likely to fall significantly.”

Forecasting that the household savings rate will fall below the “break-even rate” to a record rate of 3.5 percent in the second quarter of 2023, Goldman Sachs predicted that real disposable income will fall by 2.9 percent and real consumption by 1.4 percent in 2023.

Goldman Sachs, which expects a 50 basis point rate hike from the BoE in September, also emphasized that the risks are upside for the expectations of 25 basis point rate hikes for November and December.

Ali Esen

Istanbul University, Department of Mathematics. Interested in science and technology.

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