Risk of recession on the up

According to the results of a recent poll the risk of recession in the UK is on the up. This comes after a poll was carried out, which involved surveying around seventy economists. The general opinion was that the state of the economy and the increased risk of recession would force the Bank of England to cut the base rate next year in spite of soaring inflation levels.

The result of the poll that was carried out showed that economists had cut their growth predictions for this year from 1.7% in June to 1.5% for July. They had also cut the growth prediction for 2009 from 1.5% to 1%. The likelihood of recession in the next twelve months has grown from 30% in June to 40% for July.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, said: “The UK economy is clearly heading for at least a sharp slowdown with about a one in three chance that this could turn into an outright recession.”

The rise in inflation, which has soared to 4.4%, has resulted in the Bank of England leaving the base rate on hold for a number of months, and many officials now feel that there will be no further rate cuts this year despite the state of the economy and the risk of recession.