Recession relief... but is borrowing about to spiral?

Unsustainable household borrowing could cause real problems down the line, says James Moore

Mortgage lending and consumer credit are forecast to rise by the ITEM club (PA)

Some much-needed optimism to start the week as the EY ITEM Club, which uses the Treasury’s model for its forecasts and commentary, joins a growing consensus that Britain’s economy should avoid recession.

It also thinks the nation’s well-capitalised lenders can support this better-than-expected outcome, despite ructions in the international financial system that have forced several bank rescues, including the hurried takeover of the systemically significant Credit Suisse by larger rival, UBS.

A combination of (soon to be) falling inflation (we hope), lower-than-expected energy bills (seems nailed-on) and a resilient (for now) jobs market means ITEM expects UK GDP to grow by 0.2 per cent in 2023, rather than contracting as previously forecast.