Goldman predicts UK economy entering recession in fourth quarter

Earlier this month, the Bank of England unleashed its biggest interest-rate hike in 27 years and warned the UK is heading for more than a year of recession

The recession prospects are still unlikely to deter the Bank of England from tightening monetary policy further, Goldman said.

Goldman Sachs Group expects the UK economy will slip into recession later this year, with the risk that it could turn out to be a deep contraction amid soaring energy costs.

The UK’s gross domestic product is expected to fall by around 1% through mid-2023, Goldman said in a research note Monday. Annual output next year will likely shrink by 0.6%, a sharp turnaround from Goldman’s previous estimate of a 1.1% expansion.