UK Economy Forecast: Zero Growth, Rising Unemployment

0:00On April 20th, a new report from the EY Item Club paints a rough picture for the UK economy forecasting zero growth in the second and third quarters. Of this year, basically flatlining for six straight months. They blame a massive energy price shock from the Iran conflict, which could push inflation up to nearly 4% soon, while unemployment climbs. To 5.8% by May 20th, that means 250,000 more people out of work, the worst since 2014, and even tougher than pandemic levels, hitting. Families in business is hard with squeezed spending installed investments. Recent official data showed a surprise 0.5% growth in February. But the report calls it overstated due to data glitches, and predicts the UK will flirt with recession mid-year, even gloomier than the IMF's recent cuts to grow forecasts. Meanwhile, a silver lining for borrowers, the Bank of England should hold interest rate steady this year, despite rising prices, setting up for cuts.

1:01Next year, as the economy stays fragile. This one's got the Prime Minister and Chancellor sweating over tough times ahead.