The UK could enter a recession this year. The economy is a little unstable right now, and according to the movement on Smarkets political markets, Britains are increasingly becoming more pessimistic.
A man walks down a half-empty aisle in a grocery store in London. Spurred by logistics issues, Brexit, and more, a recession may come this year. (Image: CNBC)The UK government is borrowing more money than it has in years, according to the UK s Office for National Statistics. Inflation has resulted in an increase in debt interest payments and other unexpected costs.
Now the gap between spending and income, as of February, is £13.1 billion (US$17.36 billion). This is the second-highest figure since 1993. The Guardian adds that interest payments on government debt increased over 50%, to £8.2 billion (US$10.866 billion), as a result of out-of-control inflation.
This, in part, has contributed to a more pessimistic outlook of the UK s economy this year. Smarkets indicates that the odds of a recession in the country now stand at 33.78%. This is almost a 13% increase from where it was a month ago.
Inflation, Fuel PricesThe majority of people also believe inflation will likely continue to rise. Data shows that 78% of Smarkets bettors think it will hit 7.5% by July, representing a 26% increase from the end of last month. At that time, 45% didn t think it would. But that figure has dropped to 30.3% as of today.
There is a little bit of good news, though. More people now believe fuel prices won t skyrocket out of control. On Smarkets, on the question of whether it will reach £2 (US$2.65) by the end of the year, 82% say no. This is up from 56.5% a few days ago.
The lines will shift in the next couple of days. Rishi Sunak, Chancellor of the Exchequer and the chief executive of the UK s treasury, will provide a government budget update to legislators tomorrow.
Sunak Could Become Next Tory LeaderSunak is on track to potentially take over for Prime Minister Boris Johnson, still , as the leader of the Conservative Party. Smarkets shows him as the front-runner for the position, although his odds slipped to 23%. This past January, Sunak was getting 40%.
The challenger is way out in front of another potential candidate, Liz Truss. At one point, she was getting as much as 25% of the voting bandwidth. Now, she s at 9.09%.
On the lighter side of things, Smarkets makes tuning into Sunak s budget address entertaining. It has a market on certain phrases that he might use. Energy bills is getting 57%, while Hardworking families is getting 33%.
One phrase has really low odds, which is a very good thing. No money left is at 6.25%.
