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Future of British Business

UK Recession Risks Grow With Record Deficit and Output Slump

  • Tax increases and inflation are draining consumer’s pockets
  • Treasury struggles to pay for energy subsidy and debt service
Updated on

British companies signaled output dropped at the fastest pace since the start of the pandemic as the government budget deficit widened to a record, adding to evidence that the economy may be in a shallow recession.

S&P Global said its index of sentiment from purchasing managers fell more sharply than expected in January, led by a deterioration in services that had previously propped up the economy. The Office for National Statistics reported the highest ever December shortfall after soaring interest rates jacked up the cost of debt service.