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UK recession risk in next year up to 30% from 25% a month ago: Economists

Lucy Meakin & Harumi Ichikura | Bloomberg/ 10 Feb 19 | 12:14 PM

Anti-Brexit demonstrators wave EU and Union flags outside the Houses of Parliament in London. File photo: Reuters

There's almost a one-in-three chance of a UK recession in the 12 months, according to a Bloomberg survey of economists.

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The probability of two consecutive quarters of negative growth has increased to 30 per cent, the highest since the end of 2016, the survey of 10 economists found. That's up from 25 per cent a month ago. It was at 20 per cent or lower for all of 2018. 

ALSO READ: British and US Banks at loggerheads over ties with EU ahead of Brexit

The survey was conducted February 1-6, before the Bank of England published new forecasts that see the slowest economic growth in a decade in 2019 and a slightly greater than 20 per cent chance of a recession. Governor Mark Carney told a press conference that a no-deal Brexit would increase the probability of a contraction. 

Economists put the chances of a recession at almost 50 per cent in the immediate aftermath of 2016's Brexit vote, but the economy continued to expand. There hasn't been a quarterly contraction since 2012.

ALSO READ: Explainer: How will finance work if there is a no-deal Brexit? 

BOE policy makers will have further chance to explain their outlook at events in London this week. Carney discusses risks to the global economy in a speech on Tuesday, while external Monetary Policy Committee member Gertjan Vlieghe will give his thoughts about the UK on Thursday. 

Economists will also have a slew of fresh UK data to consider, including:

Fourth-quarter GDP (Monday)Inflation (Wednesday)RICS house prices (Thursday)Retail sales (Friday) 

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