Skip to main content

At the back of the pack

The 0.3% q/q contraction in Q3 left real GDP 0.8% below its Q4 2019 pre-virus level and the UK economy lagging even further behind its major counterparts. In contrast, GDP has risen above its pre-pandemic level in all G7 economies, including the US (4.4%) and the euro-zone (2.2%). This relative underperformance is likely to continue in 2023. We continue to be more pessimistic than most in expecting the UK economy to endure a recession involving a peak-to-trough fall in real GDP of 2.0%. That compares to the 1.0% decline in the euro-zone and 0.5% drop in the US that we expect. As a result, we expect the UK to be the only G7 economy that is still smaller than before the pandemic by the end of 2024. 

Drop-Ins – The World In 2023 (10-11 January): Will 2023 be another rollercoaster year for economies and markets? Join our senior economists for these special briefings on 10th and 11th January to find out what to expect in the coming 12 months. Register now

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access