Economic Commentary [February 2023]

Mairi Spowage; Rob Watts; Allison Catalano; Ciara Crummey; Ben Cooper; Hannah  Randolph; Emma Congreve

Economic Commentary [February 2023]

Mairi Spowage, Rob Watts, Allison Catalano, Ciara Crummey, Ben Cooper, Hannah Randolph, Emma Congreve

Economics

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Abstract

As we settle into 2023 it is clear the effects of the economic challenges that defined 2022 will very much continue to be felt this year. While inflation is largely believed to have peaked, it remains close to multi-decade highs and the Bank of England will need more convincing evidence that inflation is beaten before calling time on further rate hikes. The UK economy is likely to enter recession this year, or at best stagnate, as elevated inflation squeezes demand and the impact of higher interest rates further weighs on activity. However, the economy showed unexpected resilience in the closing months of 2022 and by the standards of past recessions this is likely to be a shallow one, with growth expected to resume towards the end of the year

Original language	English
Pages (from-to)	1-35
Number of pages	35
Journal	Fraser of Allander Economic Commentary
Volume	46
Issue number	4
Publication status	Published - 8 Feb 2023

Keywords

labour market trends
Scotland
Scottish economics
economic forecasting

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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FEC_46_4_2022_Economic CommentaryFinal published version, 5.01 MBLicence: Strath_1

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T1 - Economic Commentary [February 2023]

AU - Spowage, Mairi

AU - Watts, Rob

AU - Catalano, Allison

AU - Crummey, Ciara

AU - Cooper, Ben

AU - Randolph, Hannah

AU - Congreve, Emma

PY - 2023/2/8

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AB - As we settle into 2023 it is clear the effects of the economic challenges that defined 2022 will very much continue to be felt this year. While inflation is largely believed to have peaked, it remains close to multi-decade highs and the Bank of England will need more convincing evidence that inflation is beaten before calling time on further rate hikes. The UK economy is likely to enter recession this year, or at best stagnate, as elevated inflation squeezes demand and the impact of higher interest rates further weighs on activity. However, the economy showed unexpected resilience in the closing months of 2022 and by the standards of past recessions this is likely to be a shallow one, with growth expected to resume towards the end of the year

KW - labour market trends

KW - Scotland

KW - Scottish economics

KW - economic forecasting

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JO - Fraser of Allander Economic Commentary

JF - Fraser of Allander Economic Commentary

IS - 4

ER -

Economic Commentary [February 2023]

Abstract

Keywords

UN SDGs

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Monetary tightening, the likelihood of a 'soft landing' and the Beveridge curve in the US and the UK

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