Brits braced for a gloomy 2024 as two thirds expect UK to enter a recession

by | Jan 16, 2024

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New nationally representative research from wealth manager Quilter, gathered by YouGov, reveals that almost two thirds (61%) of Britons are not confident that the UK will avoid a recession this year.

The research follows recent UK GDP data from the Office for National Statistics which revealed UK GDP fell by 0.1% in Q3 2023 and Q2’s previously positive figure was revised down to show no growth, leaving the economy on the brink of a recession and many people’s finances hanging in the balance.

Quilter’s research found that not only did almost two thirds (61%) of Brits say they were not confident the UK would avoid a recession in 2024, but only around a fifth of people (22%) said they were confident one would be avoided.

 
 

What’s more, Quilter’s research found that 32% of Brits reported that their current finances and earnings would not be sufficient to allow them to manage their daily expenses in the event of a recession.

Sue Loveridge, financial planner at Quilter, says: “The UK economy has faced an incredibly challenging few years and the strain is now taking a real toll on people’s finances. The UK barely scraped by without a recession in 2023, and our latest research reveals the majority of Brits expect 2024 to have an even worse fate.

“The cost-of-living crisis has had a significant impact on people right across the UK. Interest rates remain high, rent costs have soared, and inflation has only recently started falling to a more palatable level so it is little wonder that so many people feel they could not cope financially should a recession hit.

 
 

“Though the prospect of a recession is daunting, it is not a done deal and for now there is still a chance that the UK avoids one. Inflation is heading in the right direction and interest rates are widely expected to start to fall this year. We are already seeing mortgage rates fall which should ease the pressure on household finances, and we can expect this to continue should the Bank of England opt to reduce rates later in the year. The Chancellor’s 2% National Insurance cut has also now come into effect which will see the average UK worker taking home an additional £447.86 a year, and with an election looming Jeremy Hunt may look to curry favour via additional tax giveaways during his spring budget. 

“There are also plenty of opportunities for savers and investors this year. For many people cash has felt like a safe place over recent years given the higher interest rates on offer, but cuts to central bank interest rates can act as immediate stimulants to financial markets. If you are sat in cash, you risk missing out on the best days which could cost you considerably in the long run.

“Similarly, services such as Citizens Advice and Step Change offer support if you are struggling or in need of debt advice. Seeking professional financial advice can also be highly beneficial as a financial planner will help ensure you are making the right decisions based on your personal circumstances.”

 
 

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