UK to dodge recession.

The trade organisation stated in its latest economic projection that the UK economy appeared to have performed better than projected in the first half of the year, putting it on pace to escape recession.

It is predicted to rise by 0.4% this year and 1.8% in 2024, up from the CBI's earlier forecasts of a 0.4% drop and 1.6% growth, respectively.

The CBI stated that "tailwinds to growth" have grown since its December prediction. It also stated that inflation was on pace to decline further this year, with food inflation decreasing from 15.5% in 2023 to 4.4% in 2024.

It did, however, express a note of caution, claiming that the risks to its inflation prediction remain "very much to the upside" due to persistent domestic pricing pressures and wage increases. It also anticipates that the Bank of England will hike interest rates twice more before reaching 5% in August.

"Business and consumers alike will be relieved that the UK economy has avoided recession and will re-enter growth territory in the second half," stated Rain Newton-Smith, CBI director general.

"However, businesses want to see growth and productivity accelerate."

"Tailwinds to both the UK and global economies have firmed since the start of the year," said Alpesh Paleja, primary economist. “Lowering energy prices, China relaxing Covid restrictions, and lessening supply chain disruptions have all contributed to some resilience in domestic economy.”

"While encouraging, there is no escaping the fact that this year will be another challenging one for both businesses and households."

"It is also concerning that the United Kingdom underperforms in many areas critical to our long-term prosperity."

(Sources: investing.com, sharecast.com)