UK Heads Toward Recession Despite Signs of Eventual Recovery

• UK economy expected to show contraction in Q4 2022, meaning technical recession • Poses issue for Sunak's pledge of growth by year-end, gives ammunition to Labour • Damage stems from Truss era but Hunt had promised stability for investment • Signs economy improving in 2024 but Bank of England worried about rising wages • Inflation signals mixed - rose in Jan but expected to fall sharply by mid-year