Global economy 2023: How countries are tackling the cost of living crisis

Inflation increased significantly in the US in late 2021 and early 2022, reaching levels higher than at any time in the last 40 years

UK: recession on the horizon

Alan Shipman, Senior Lecturer in Economics, The Open University

At first sight, the UK’s cost of living crisis might look fairly mild compared to other countries. Its inflation rate was 10.7% in November 2022, compared to 12.6% in Italy, 16.% in Poland and over 20% in Hungary and Estonia. But the Bank of England expects a recession in the UK this year – possibly lasting until mid-2024.

This is because the proportion of UK households that lack insulation against financial setbacks is unusually large for a wealthy economy. One pre-pandemic survey found that 3 million