The resilience of the economy last year is probably due to a combination of the government’s support, the strong labour market and both households and businesses dipping into some pandemic savings. Those three factors are unlikely to provide as much support this year. And although the biggest falls in real incomes are now behind us, the drag from higher interest rates will intensify. As such, we still think there will be a recession this year, which will contribute to a surge in business insolvencies.
UK Drop-In (Wednesday 15th Feb.): Join us shortly after the January CPI release for a briefing on the UK macro outlook, including why we expect the biggest wave of business insolvencies since the GFC. Register now.
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