UK business leaders expect inflation to reach 14% before the end of this year, signalling the country's entry into recession.
The British Chamber of Commerce (BCC) forecasts a recession following the UK economy's contraction for three consecutive quarters between Q2 and Q4 2022.
The GDP also downgraded its expectations for GDP in 2022 from 3.5% to 3.3%, significantly lower than the 7.4% growth recorded in 2021.
Inflation is expected to peak at 14% in the fourth quarter of this year, falling to 5% by the end of 2023.
Business investment is set to grow at 2.7% in 2022, driven by growth in building and construction. However, the increase for 2023 is expected to be marginal at just 0.6%.
Alex Veitch, director of policy at the BCC, said:
"Our latest quarterly economic forecast will not be of any comfort to either consumers or businesses.
"The extreme inflationary pressures already present are only likely to increase as we head towards Christmas, with the UK economy already thought to be in recession."
Following the appointment of Liz Truss as Prime Minister, Lalitha Try, researcher at the Resolution Foundation said:
"The new Prime Minister needs to improve Britain's longer-term outlook, which can only be achieved by a new economic strategy that delivers higher productivity and strong growth."
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