UK recession risk in 12 months seen climbing to 30%
LONDON: There’s almost a one-in-three chance of a UK recession in the 12 months, according to a Bloomberg survey of economists.
The probability of two consecutive quarters of negative growth has increased to 30%, the highest since the end of 2016, the survey of 10 economists found. That’s up from 25% a month ago. It was at 20% or lower for all of 2018.
The survey was conducted between Feb 1 and Feb 6, before the Bank of England (BoE) published new forecasts that see the slowest economic growth in a decade in 2019 and a slightly greater than 20% chance of a recession.
Governor Mark Carney told a press conference that a no-deal Brexit would increase the probability of a contraction.
Economists put the chances of a recession at almost 50% in the immediate aftermath of 2016’s Brexit vote, but the economy continued to expand.
There hasn’t been a quarterly contraction since 2012.
BoE policy makers will have further chance to explain their outlook at events in London this week. Carney discusses risks to the global economy in a speech on Tuesday, while external Monetary Policy Committee member Gertjan Vlieghe will give his thoughts about the UK on Thursday.
Economists will also have a slew of fresh UK data to consider, including fourth-quarter GDP (today), inflation (Wednesday), RICS house prices (Thursday), retail sales (Friday).