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HFM’s Outlook 2023: UK and the Pound


UK and the Pound – 2023 Outlook

This year will be extremely challenging for the UK economy and the UK’s recovery from pandemic. However, the recovery is being overshadowed in the cost of living crisis, which includes low consumer and business confidence, strikes, and ongoing uncertainty over the war with Ukraine. 

Inflation in the UK soared to 11.1% during 2022. The country had a GDP of -0.3% in Q3 2022 and is expected to have a GDP of -1.0% in Q4 2022 which would be the start of a recession that will likely last through 2023 making the country’s long term growth more complicated. The UK100 moved in an opposite direction during the year, with a range of 7687.6 (Feb), to 6824.5(Oct), with consumer confidence and business investment tilted to the downside. This trend is expected to continue until 2023.

All signs point to a slowing of UK growth in 2023. The UK economy will contract significantly and be among the most weakest G20 countries except Russia. For the first quarter of 2019, negative GDP data is expected to continue falling by -2.2%, and to fluctuate between 0.9% and 1.3% until the end. The annual GDP growth rate is expected to decline to -2.1% before the end of 2023. GDP is still 8% below its…

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