Is there going to be a recession in 2022?

Journalist: Samantha Downes, Currently at the I (business editing some Sundays (freelance) and Mortgage Solutions

ended 12. May 2022

Looking for well thought out views for a feature going in the I tomorrow

11 responses from the Newspage community

"There will almost certainly be a recession. When? Who knows, but all the signs point to it coming and it could hit the economy like a train. As a small business owner, I am just going to concentrate on running my business as best I can, and see if I can make it through. I have just survived the worst two years in the modern age and I hope that will see me through again. Also, whatever happens with the economy, you can't dwell on it as that can impact you psychologically. You just need to focus on what you do, and do best, and hope that sees you through."
"It's almost a certainty that the UK is heading into a recession. I wish it wasn't, but it is. In most cases, recessions are often caused by combinations of problems occurring at the same time, and right now we have rising interest rates, soaring inflation, low consumer confidence, stagnant wages, rising bills and reduced real incomes. Profit margins for businesses are also being squeezed by non-tariff barriers because of Brexit and raw materials are costing more due to supply chain issues. So we've got a perfect storm of all the worst factors piling in simultaneously, causing a negative economic feedback loop. As the pounds in our pocket lose their purchasing power at the same time as we have less to spend due to increased food and energy prices, a reduction in consumer spending is inevitable. This then leads to job losses. This means lower aggregate demand in the economy, and hey presto, we're in a recession. It's near impossible to imagine a scenario where we don't enter a recession. Oh, and there's probably a housing bubble to deal with, too. Time to buckle up for a rough ride ahead."
"It definitely looks like a recession is on the cards, unless the Government acts, which looks increasingly unlikely. Lurching from crisis to crisis, they just seem to be frozen like rabbits in the headlights. Weak and wobbly strikes again. Costs are going up by the day and incomes are stagnating. The only option with no outside intervention is for consumers to tighten their belts and that will hit growth hard."
"A recession is defined as two consecutive quarters of negative GDP growth, so a shrinking economy. There is a school of thought that the powers that be actually want a recession to cool inflation. I'm not 100% sold on that one myself but it's certainly a theory. Even if there isn't technically a recession, I think it will feel like a recession for many households, as their disposable income takes a hammering from increased fuel, energy and food prices. Working hard and not having any money left at the end of the month to spend on stuff you actually want to is a pretty joyless existence. So, will there be a recession in 2022? Possibly, but even if technically we don't fall into one, it's still going to feel pretty grim for a bit."
"I am starting to have serious concerns about the UK economy's ability to weather the various economic storms we are seeing. I have personally cut back on unnecessary expenditure (Disney+, NOW TV, etc) due to rising energy bills, and I can see the general public having to make much greater cutbacks. Unfortunately, one person's spending is another person's income. For example, if we cancel our gym memberships to save costs, we may put many personal trainers out of work, and they will have to make similar cutbacks, affecting others. So there's a danger of a negative chain reaction of ever-decreasing demand leading to a long-term recession, arguably the biggest since the Great Depression. The above, coupled with a potential trade war with the EU over the Northern Ireland Protocol paints a bleak picture, and a recession could well be on the cards. That said, we are a resourceful and entrepreneurial nation, and things might turn out OK."
"I thought central bankers were supposed to control inflation? They have failed us and the US will put the world into recession as it needs to maintain its world credibility with an overly aggressive interest rate rise policy. It's a narcissistic world at the top tables of economic policymakers and Governments. We have a high percentage chance of a recession in the UK and they can become a self-fulfilling prophecy as I'm sure people have been feeling the pinch for some months now. Mortgages are more expensive, heating your home and putting fuel in the car are more expensive, and the food we buy is more expensive. Going away is more expensive. This all means less disposable income for everybody with a lot of people in the UK not even having any spare money. Also, the more we talk about it, the more likely it is to happen I'm afraid."
"The economy is run by sentiment, which seems to be changing as pressure on consumers builds. If confidence is shaken enough, a recession is self-fulfilling. As I have repeatedly said over the past few months, the future looks challenging and our Government does not have a silver bullet because the inflationary pressures are external, not the result of a booming economy. There is the chance that the storm will hold off or dissipate before it arrives, but I think that is increasingly unlikely. We’ve not experienced the disruption expected to supply following Brexit as this was lost in the disruption caused globally by the pandemic. We also now have the invasion of Ukraine, which is also hammering confidence and seeing energy bills soar. I would be very pleased to be wrong but a recession feels inevitable."
“The current financial climate for small businesses appears to be deteriorating, with a strong sense of uncertainty and lack of confidence in the strength of our economy. Without Government intervention, an impending recession is most likely. Our own research appears to back this up, with a staggering 71% of financial intermediaries and business owners we spoke with this week predicting that the UK economy will enter a recession this year. With a clear concern coming from UK SMEs, the government needs to act fast to rectify this. If not, the impact will profound on those businesses that make up the backbone of our economy, and who have fought for their survival this far.”
"We are almost definitely in for a rough few years and heading for a recession. My best guest would be early 2023, as a 'official' recession requires two successive quarters of negative economic growth. It's inevitably payback time for the economic damaged caused by Covid measures such as lockdowns and the gargantuan government spending never seen before in peacetime. There is no such thing as a free lunch and now we're going to have to pay for it."
"Without a proper solution to the rising cost of living, there is going to be a huge recession soon enough. Due to the high increases of costs we are left with few opportunities to make money from other businesses who are also struggling so it's a back and forth situation that helps no one. This country is run by ''everyone for themselves'' kind of people, so it's no surprise the economy is going under. Companies will end up reducing their teams by letting people go, shrink their marketing budgets even more and prioritising staying afloat rather than investing. We are facing a financial nightmare in the months ahead."
"It feels like we are in a recession already. A recession is two consecutive quarters of negative growth, and we are already in May and the economy is not in the red yet. It is highly unlikely we will see an official recession this year, more likely in 2023, perhaps as early as the end of the first quarter if the last three months of this year see the economy shrink."