The cost of living crisis and Omicron will hit UK economic growth this year, according to forecasts.
The EY ITEM Club predicts that gross domestic product (GDP) will grow by 4.9 per cent in 2022, down from predictions of 5.6 per cent.
Downgrade: The EY ITEM Club predicts that GDP will grow by 4.9 per cent in 2022, down from predictions of 5.6 per cent
Omicron’s impact at the start of the year and the expected squeeze on house hold incomes were ‘key’ to the downgrade.
Analysts also expected inflation to surge to nearly 7 per cent in the spring.
Martin Beck, chief economic adviser to the EY ITEM Club, said: ‘Households will benefit from government help on energy, but [it] will not fully offset the squeeze on household incomes.’
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