Peter Arnold, EY UK Chief Economist, joined Adam Stones for episode 2 of the 'On the Spot' podcast!

Peter leads the economic policy team at EY in the UK and has over 20 years of experience in advising both government and private sector clients in the UK and internationally on economic policy impact assessment, regulation, and in interpreting macroeconomic forecasts for business planning.

He joins the show to discuss the Winter Forecast of the EY ITEM Club, a leading UK economic forecasting group, whose forecasts are independent of any political, economic or business bias. The Winter Forecast was published in late January. (Link to report in comments).

2022 saw a global energy price shock, inflation running at a four-decade high rate, political turmoil, and the sharpest tightening in monetary policy since 1989…

Unsurprisingly there was a lot to cover in the episode! Here are just some of the key talking points from the ITEM Club's forecasts:

• Recession -  the UK economy is now expected to contract 0.7% in 2023, bigger than the 0.3% contraction predicted in October.
• Labour market - unemployment is forecast to peak just below 5% this year.
• Consumer spending - is likely to fall 1.4% this year, with growth of 2.3% expected in 2024.
• Business investment - likely to remain a relatively weak spot. EY ITEM Club now expects a fall of 0.8% this year. Weaker business investment is one of the factors likely to slow the recovery from the recession.