Britain could face a lost decade if no action is taken, Britain's largest business group has warned.

(AFP file photo)

[Financial Channel/Comprehensive Report] The largest business group in the UK has warned that companies will not invest, inflation will soar, and the economy will shrink. Such a bad economic situation will continue until 2023. If no action is taken, the UK may face up to 10 years of economic growth stagnation.

According to comprehensive foreign media reports, the Confederation of British Industry (CBI) expects that the British economy will shrink by 0.4% next year due to high inflation and companies suspending investment, and the long-term growth prospects are bleak.

The figures released by the CBI are down sharply from their June forecasts, when the group predicted that the UK would grow by 1% in 2023 and did not expect domestic GDP to return to pre-pandemic levels until mid-2024.

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Tony Danker, director of the CBI, said that the UK is in a state of stagflation, with soaring inflation, negative economic growth, declining productivity and declining business investment.

Businesses may see potential growth opportunities, but economic headwinds cause them to put investments on hold in 2023.

Danke pointed out that if no action is taken, the UK will lose 10 years of growth. GDP is the result of two major factors, people and their productivity.

But right now Britain has neither the people it needs nor the productivity.

The inflation rate in the UK reached 11.1% in October, hitting a 41-year high, which greatly compressed consumer demand. CBI expects inflation to fall slowly, with an average of 6.7% next year and 2.9% in 2024.

The unemployment rate is expected to climb to a peak of 5% in late 2023 and early 2024, far exceeding the current 3.6%.

The Office for Budget Responsibility (OBR) recently released a report stating that the UK is already in recession and predicts that economic growth will drop by 1.4% in 2023.

The CBI's forecast, by contrast, is less pessimistic but in line with the OECD (Organization for Economic Co-operation and Development), which expects the UK to be the worst-performing economy in Europe next year, after Russia.

The CBI predicts that by the end of 2024, UK business investment will be 9% below pre-pandemic levels, and output per capita will fall by 2%.

To avoid this, the CBI is calling on the government to make the post-Brexit work visa regime more flexible and provide greater tax incentives for investment.

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