Banking giant Goldman Sachs has downgraded its British economic forecasts predicting recession to hit country in the final quarter of 2022.
The Bank of England has already warned of a recession and now Goldman Sachs has warned that surging inflation will hit household consumption.
Goldman said it expects the UK will keep shrinking throughout 2023 and is forecasting a 0.6% contraction during the year.
A note from Goldman Sachs economists said: “Concerns around cost-of-living pressures in the UK have continued to intensify on the back of the worsening energy crisis.
“Real consumption is still likely to decline significantly.”
It also warned that the recession could be even more severe and protracted if gas prices remained high for longer than feared, and there was less additional fiscal support from the Government.
