Will there be a recession in 2024?

In 2023, there were forecasts in the world economy that led many to suggest there was a recession on the cards, yet some economists still remain optimistic that a recession will be avoided entirely. For a more detailed explanation on what a recession is, read our recession article here.

As we stated, there are multiple ways to define a recession, and the UK is unique in defining it as GDP being down for two consecutive quarters. The US defines a recession by taking a more scientific look at the economy, before announcing a recession.

The National Bureau of Economic Research (NBER) in the US defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.”

The UK narrowly avoided a recession in 2023, as did the US, but there is no suggestion that either economy is out of the woods yet. So will there be a recession in 2024? And how likely is a recession to happen in 2024? We cover everything you need to know.

Possibility of a UK recession

Expert predictions for a recession

As with most economic predictions, there is disagreement, with some predicting that 2024 will definitely see a recession, and others saying that one has already been avoided. Reuters has even referred to it as a recession that ‘never was’, and suggested that investors have generally moved on from the fear of a recession, or a fear that it will be a heavy one.

However, UBS has made a firm prediction for a recession in 2024, which will then trigger massive interest rate cuts from the Fed to try and drag the economy back into positive inflation. The Swiss bank has predicted a mid-2024 recession, which will then encourage the Fed to begin a process of easing and slash interest rates.

Yet on the flip side, NBER’s Business Dating Cycle Committee has predicted that the economy is still going strong. As a predictor of recessions, NBER has so far been silent, demonstrating that they’re optimistic that a recession is not likely to happen.

Aneka Beneby, director of Julius Baer Group, told Bloomberg that she “sees no imminent recession in the US” and that she believes “the Fed is done raising interest rates”. Bank of America CEO Brian Moynihan also confirmed that he believed the US economy is set for a soft landing.

Economic indicators

All eyes are on the US in 2024. As we have demonstrated in our articles on dollar dominance, the US economy will determine the outcome for many other economies around the world.

Some of the more official institutions have also publicly made predictions about whether there will be a recession in 2024. For more official predictions from central banks, the predictions are equally as varied. The Fed’s official prediction is that there will not be a recession in 2024, and that it expects a soft landing instead.

However, the Federal Reserve bank of New York has stated that it predicts the US economy will slip into a recession, and that there is a 56% probability of this outcome.

Some of the top banks have also varied on their recession calls. Deutsche Bank has predicted that there will be a recession in the US in H1 of 2024, and Societe Generale has made a bet that there will be a mild recession halfway through the year.

US FED to cut interest rates

When will the Fed cut rates?

Timing is everything when it comes to rate cuts. Interest rates were raised to battle inflation, and now inflation is dropping, central banks can look towards cutting rates to bring growth back to normal. But cutting rates too early could cause inflation to rise again, undoing all the work of the past year.

The Fed has not announced yet when they will make rate cuts, but they have made several indications.

There is a strong chance that the Fed will make their first 2024 rate cut in March, and then two more rate cuts are expected later on in the year. Some analysts predict that there could be as many as six rate cuts in 2024, however this is at the more aggressive end of the spectrum, and much more likely if a recession does happen.

The Bank of England is following a similar form. Andrew Bailey has stated many times that it’s “still too early” to talk about dates for rate cuts, although they are expected to somewhat follow the activity of the Fed. Inflation is still a threat from the Bank of England’s perspective.

Potential impact of a 2024 recession

If a recession occurs in 2024, it’s likely to be mild. The anticipation for a huge recession was strong off the back of Covid-19 lockdowns, but this predicted economic catastrophe in the world economy is yet to occur.

While many experts predict a recession, many others predict a soft landing. Central banks are staying cautious about rate cuts and inflation, avoiding a “premature declaration of victory”. Recessions are relatively common, and will often happen on a cycle. Read our recession article for details on how a recession may affect you personally.

UK possible recession in conclusion


It’s hard to know whether 2024 will actually have a recession. There are many events within 2024 that could affect the economy either way, and the rate cuts that are due may determine this outcome. Central banks, financial institutions and experts are all divided on whether a recession will occur in 2024, but it’s likely to be close.

The UK and US are both due elections in 2024, which could change economic policy, either for better or for worse. A recession prior to these elections could also change voter sentiment.

For more articles on currency and economics, make sure to stay posted on our weekly articles at CurrencyTransfer on our Expert Analysis section. We also post daily updates on the market with our Market Commentary.

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Caleb Hinton

Caleb is a writer specialising in financial copy. He has a background in copywriting, banking, digital wallets, and SEO – and enjoys writing in his spare time too, as well as language learning, chess and investing.