Bank of England no longer expects 2023 recession

The Bank of England no longer expects the UK to enter a technical recession next year.

The economy is now expected to grow “slightly” in the second quarter of this year, meaning the technical definition of a recession - which is two consecutive quarters of decline - will not be met.

In its projections last month, the Bank’s Monetary Policy Committee said the UK’s GDP would decline by 0.1 per cent in Q1 and another 0.4 per cent in Q2.

However, it now expects the economy to grow marginally in the second quarter.

Measures announced in the Budget contributed to the change. The Bank said policies announced last week by Jeremy Hunt could increase GDP by around 0.3% over the coming years.

The Committee said that it no longer expected net job losses in Q2. It had previously projected a rise in the unemployment rate, but now it expects employment growth of 0.2%.

The announcement came as the bank announced it would hike interest rates to 4.25%, voting 7-2 for a raise.