Sir Martin Sorrell, founder and chairman of the media company S4 Capital, has predicted a “bathtub” shaped recession for the UK, with two difficult years in 2023 and 2024.
He welcomed the government’s growth strategy but said the timing was wrong.
Sorrell claimed that the corporation tax change will not encourage investment, as long as there is heightened uncertainty over the UK’s future.
Speaking on BBC Radio 4’s World at One he said: “I don’t think rates of tax necessarily determine whether people invest, it’s certainty or uncertainty that makes you invest and the environment partly as a result of his statement on Friday and what he said over the weekend that there might be other unfunded tax reductions… has created even greater uncertainty.”
“ The issue of uncertainty is the real issue…..and we’re not going to get clarity for the next few weeks: no parliament, the Conservative party conference coming up.”
“This is just like the CEO and the CFO of a company coming up and saying: my revenue’s down, my costs are up and I have no specific plan for dealing with it, just leaving the shareholders in limbo.”
Asked about the likely shape of the recession, Sorrell said: “This is a bathtub recession. What we’re going to see in 2023 and 2024 are difficult.”
Sorrell continued: “We’re in a difficult place. I don’t think we’ll see a recovery until the US presidential election in 2024.”
“What I think the government has done here is gamble politically that by the general election in the UK in 2024 there will be some growth and that will bail them out. That is a heck of a gamble, particularly if you don’t have a fiscal plan.”