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Can the Energy Price Shock Push the UK Into Recession?

Deutsche Bank warns that a massive global energy price shock could push the United Kingdom into recession, slashing its GDP growth forecast to a narrow 0.35‑0.7% range. The analysis highlights a “non‑linear” risk where growth could contract faster than traditional models predict, compounding the country’s fifth major supply shock in ten years. Rising energy costs are eroding disposable incomes and dampening business investment, while unemployment has already risen by nearly one percentage point. The bank argues that the growth impact will soon dominate the Bank of England’s policy narrative, outweighing lingering inflation concerns.