The UK’s impending recession could be twice as bad as previously thought, according to leading economic forecasters at the business consultancy EY.
Reduced government support, higher taxes and an overall worsening outlook have all led the firm’s analysts to conclude that the next three years could be worse than they anticipated three months ago.
In October, EY’s Item Club had predicted a 0.3% contraction in gross domestic product (GDP) this year, followed by 2.4% growth next year and a 2.3% rise in 2025.
But in an updated forecast released on Monday, it said GDP would drop 0.7% this year, followed by growth of 1.9% and 2.2% over the next two years.
The downgrade is at odds with recently published economic data and the sentiment coming out of the World Economic Forum in Davos, which suggested the global outlook was not quite as grim as first feared. In recent weeks the FTSE 100 has neared its highest level ever.
“The UK’s…
