Industry association lowers forecast: Great Britain faces a long recession

The British economy is suffering from high energy prices. Industrial production is particularly affected. But many pubs and breweries also fear for their existence.

The Confederation of British Industry (CBI) has significantly lowered its forecast for British economic growth in the coming year. Instead of a slight increase, the association is now assuming a decline in gross domestic product (GDP) of 0.4 percent. The recession that the country has slipped into will last until the end of 2023, experts from the Confederation of British Industry said.

The main reason for the weak economic development is the high inflation. In October, it initially peaked at 11.1 percent. However, the British central bank assumes that inflation will remain well above the target of 2 percent for a long time to come. “This means the pressure on households from this year will continue into 2023, leading to a year-long decline in consumption,” the CBI statement said. But even if the economy grows again, the outlook remains bleak because productivity and investment are weak, it said.

Pubs expect a 20 percent slump

The consequences of the economic crisis for gastronomy and breweries in Great Britain could be particularly dramatic: According to calculations by the British Beer and Pub Association (BBPA), pubs and breweries will have to expect an average minus of 20 percent in the coming year if the government should provide its support as previously planned on energy bills to expire at the end of March 2023.

In addition, the high inflation burdens the pubs, since on the one hand the operating costs are rising and on the other hand the customers are absent. “We’re struggling with our bills, but so are our customers, so we’re being squeezed from two sides,” Gemma Gardener, who runs a pub in the northeastern English town of Morecambe, was quoted as saying in a statement from the association. Association leader Emma McClarkin called for a long-term guarantee from the government in London that energy costs and leases are “fair and reasonable”.