BRITAIN LIKELY TO HAVE AVOIDED A 2022 RECESSION, BUT FAMILY INCOMES ARE STILL SHRINKING
Posted on 20th January 2022
Surprise economic growth in November means that the UK is unlikely to have fallen into recession last year. But this will be of cold comfort for many families who are still in the midst of a deep living standards downturn, the Resolution Foundation has said in response to ONS GDP data.
Surprising growth of 0.1 per cent growth in November (market expectations were for a fall of 0.3 per cent), coupled with 0.5 per cent growth in October, means that the UK is much less likely to have fallen into recession in 2022. Recent growth was driven primarily by the services sector which is proving resilient in the face of high inflation. The risk of recession still looms large, though, with both the Bank of England and OBR forecasting the economy to shrink in the first half of 2023.
But while the UK is likely to have avoided a 2022 recession, families are still facing a deep living standards downturn. Typical household disposable incomes are on track to fall by 7 per cent – equivalent to £2,100 per household – over this year and next, even bigger than the 5 per cent squeeze that followed the financial crisis. James Smith, Research Director at the Resolution Foundation, said: “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.”
For more information viit resolutionfoundation.org