Smarkets: Sunak Budget bluster frosty against 22% chance of recession
Smarkets Politics has registered a mixed reaction to the Autumn Budget statement, delivered by Chancellor Rishi Sunak.
“Employment is up, investment is growing, public services are improving, public finances are stabilising, and wages are rising” – bellowed Sunak to the Commons, underlying the strengths of the UK economy recovering from COVID-19 pandemic.
Yet, despite the Chancellor’s bluster, the latest politics market data from Smarkets cites that punters predict a 22% chance that Britain will experience a recession in 2022.
Recession forecasts are made against Sunak’s prediction that it will take until the start of 2022 for the UK’s economy to return to its pre-pandemic size.
The success of a budget featuring a £38 billion increase in public spending and a £25 billion budget stimulus, will depend on whether the Bank of England maintains interest rates.
Smarkets anticipates the likelihood of an interest rate rise being announced by the Bank of England next week at around 45%.
Should Sunak deliver on his bullish economic forecasts, Smarkets predicts that a UK bounce back in 2022 would likely lead to a General Election call in early 2023.
Further positives for Sunak has seen his odds of becoming the next Prime Minister improve slightly, taking over from Labour Party leader Keir Starmer as favourite at 22%.
Smarkets Head of Political Markets, Matthew Shaddick, said: “Budget reactions can often change once the details are scrutinised, but right now it doesn’t seem to have done Brand Rishi any harm, having nudged ahead of Keir Starmer as favourite to be the next Prime Minister.”