How Britain's economy might bounce back in 2023

Whatever happened to the economic boom that was supposed to follow the Covid pandemic? The 2020s, some argued, would be like the 1920s, with an economy roaring its way out of recession, to be remembered as a time of unprecedented wealth and opportunity. That is not how things have turned out so far.

While economic growth in the UK during 2022 is still likely to come out positive, the growth was concentrated in the first half of the year – in the third quarter GDP fell by 0.3 per cent. The economy, according to the Office of National Statistics, is now 0.8 per cent smaller than it was on the eve of the pandemic at the end of 2019. Moreover, almost everyone thinks a recession is now inevitable, with the Bank of England expecting recession to last throughout 2023 and into 2024.

There are plenty of reasons to feel negative about the economy, but what about the positive case? Could the narrative of a 2020s boom prove to be right all along, it’s just that we haven’t got there yet? After all, the 1920s didn’t begin to roar in 2022, only later in the 1920s (although even then it was a much more muffled roar than in the US).