Risks of a recession in the UK are rising but lower growth is the more likely outcome, according to Charlotte Ryland, co-head of equity at investment manager CCLA.
Ryland told delegates at the Room151 Local Authority Treasurers Investment Forum (LATIF) North that growth would slow due to pressures from surging inflation, the war in Ukraine and recovery from the pandemic.
However, there were some reasons for optimism on inflation – with supply chains improving and more people coming back to the workforce.
“The war in Ukraine is definitely going to be damaging to economic growth. We don’t think that will push us into recession, but clearly there is that risk there,” she said.
Ryland’s analysis coincides with the forecasts from the Office for Budget Responsibility (OBR), which were published with the chancellor’s Spring Statement. The OBR reduced its expectations for growth by 2.2 percentage points to 3.8% in 2022 and suggested that growth will then fall to 1.8% in 2023.
For investors, Ryland said that bonds would continue to generate negative real returns and would “suffer as yields and interest rates move up”. Equities were more of a “mixed picture”, while property and infrastructure investments “continue to look relatively attractive”.
—————
FREE weekly newsletters
Subscribe to Room151 Newsletters
Room151 LinkedIn Community
Join here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
