UK heading for recession later this year as inflation set to hit 14% according to latest predictions

Experts believe the UK will slide into recession this year amid a deteriorating economic outlook.

The British Chambers of Commerce (BCC) has revised its prediction for GDP growth for 2022 down to 3.3%, with inflation set to hit as high as 14% in the final quarter of the year.

It comes just a month after the Bank of England predicted a year-long recession starting this winter against the backdrop of a skyrocketing cost of living standards and plummeting household incomes.

Further figures by the Scottish Retail Consortium (SRC) revealed footfall on high streets was down more than 14% on pre-Covid levels.

Energy regulator Ofgem revealed and 80% hike in household gas and electricity bills to £3,549 in October last week.

Another grim forecast suggested that could reach as high as £7,000 by April next year.

The BCC is now forecasting a recession for the UK economy this year, with negative economic growth for Q2, Q3, and Q4.

Growth fell from 3.5% in Q2, the BCC added.

Bank of England bosses set the base interest rate at 1.75%, up from 1.25% previously – the sixth increase in a row in a bid to curtail runaway inflation.

Retail activity improved slightly on July’s figures, but was down by 14.8% in August compared to levels in 2019.

The SRC said the figures were a “worrying trend”.

Director David Lonsdale added: “Despite the improvement, visits to stores remain well down on pre-pandemic levels and Scotland continued to lag the 12 other parts of the UK surveyed for a fourth month in a row.

“That’s worrying given inflationary headwinds and the likely impact on consumer sentiment and spending power, more so in the lead-up to what is traditionally the crucial golden trading quarter for the industry in the final months of the year.”