The UK will trail other developed countries in its economic recovery from the pandemic in 2022, with economists polled for a Financial Times survey predicting that it will be held back by political uncertainty and the lingering after-effects of Brexit.
Of almost 100 economists, a majority said that UK living standards would worsen in the year ahead, with poorer households hit hardest by soaring inflation and higher taxes.
The biggest challenges they saw facing the country’s economy were global in nature: high energy prices and broader pandemic-related inflationary pressures; sustained labour shortages and disruption to supply chains; continuing waves of virus infections; and the mounting risks of climate change.
Despite the prevailing pessimism over growth, inflation and living standards, several respondents were at pains to point out that it would not be “all doom and gloom” in the year ahead.
They saw scope for a long-awaited rebound in business investment, prompted by labour scarcity, pandemic-induced digitalisation and the need to adopt green technology. These could “nudge businesses into making the types of investment necessary to minimise the dependence on lower productivity jobs”, according to Nina Skero, chief executive of the consultancy Cebr, although she and others stressed that real progress on productivity would take years, and need a much bigger push from the government.