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Overview – We’ve become more concerned about the outlook for the economy due to the drags from higher businesses taxes and the more uncertain global backdrop being bigger than we thought and the boost from government spending being smaller. Our forecasts …
31st March 2025
This publication has been updated to reflect changes to our forecasts after the October GDP release on 13th December 2024. Overview – Despite the deterioration in the outlook for the UK's key trading partners, we remain optimistic that UK GDP growth will …
10th December 2024
Overview – We are not expecting the planned fiscal policies of the government to derail the economy – we expect GDP to grow by 1.0% this year and by a decent 1.5% in both 2025 and 2026. Instead, the main influence of the government’s plans to raise public …
1st October 2024
Overview – The next government, which the polls ahead of the election on 4 th July suggest will be a Labour one, will benefit from a combination of lower inflation, lower interest rates and faster economic growth than most are expecting. We think that a …
25th June 2024
Overview – After having been too high for the past three years, inflation in the UK will be too low for the next three years, and much lower than in the US and the euro-zone. Not only do we think that CPI inflation will fall from 3.4% in February to below …
25th March 2024
Overview – With higher interest rates taking longer to percolate through the economy, we now think the recession will be shallower and GDP growth will stay weak throughout all of 2024. It’s a softer landing for the economy, but the runway is longer. And …
5th December 2023
Overview – A slower fall in core inflation than in the US or the euro-zone will mean that the Bank of England keeps interest rates on hold at the probable peak of 5.50% for longer than the US Fed or the ECB. But our non-consensus forecast that higher …
18th September 2023
Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST . Register now . Overview – As the UK’s recent problem of higher inflation …
19th June 2023
While CPI inflation will fall from 10.4% to around 3.5% this year, we think a recession involving a peak-to-trough fall in real GDP of around 1.0% is needed to ensure that domestic price pressures weaken to levels consistent with the 2.0% inflation …
28th March 2023
Overview – 2023 will be a tough year for the economy as the effects of the previous rises in inflation and previous hikes in interest rates (as well as a future rise from 3.00% now to a peak of 4.50% in early 2023) are felt. Our view that inflation and …
7th December 2022
Overview – The drag on the economy from CPI inflation being stuck at 10% for a year and interest rates rising to 5.00% will be enough to trigger a recession that involves real GDP declining by around 2.0% from its peak to its trough. What’s more, …
20th October 2022
Overview – A rise in CPI inflation from the 40-year high of 9.1% in May to a peak of 12% or higher in October will reduce real incomes by enough to mean that a recession now seems inevitable. Our forecast that real household disposable income will fall by …
18th July 2022
Overview – Even though a further surge in CPI inflation to a 40-year high of 10% in October will take the economy to the brink of recession, we think the Bank of England will raise interest rates from 0.75% now to a peak of 3.00% in 2023 to contain …
26th April 2022
Overview – Although the hit to households’ real incomes from a bigger surge in CPI inflation than most expect (to a peak of almost 7% in April) explains why we think GDP growth will be slower this year than the consensus forecast, we still think that the …
17th January 2022
Overview – The UK economy is experiencing a taste of stagflation. This won’t be anywhere near as severe or as persistent as in the 1970s. But for the next six months, the worsening product and labour shortages will put the brakes on the economic recovery …
19th October 2021
Overview – Our forecast that COVID-19 won’t significantly reduce potential supply means that the economy can run a bit hotter for longer without generating the persistent rise in inflation that would require monetary policy to be tightened. Admittedly, …
20th July 2021
Overview – While we think the reopening of the economy and the vaccine rollout will allow GDP to return to its pre-pandemic level a bit earlier than most forecasters, the big difference between us and the consensus is that we don’t think the pandemic will …
15th April 2021
Overview – Our view that the economy will return to its pre-pandemic size in Q1 2022 and that it won’t be permanently smaller due to the pandemic is a more optimistic take than that of most forecasters. It implies that the government doesn’t need to …
19th January 2021
Overview – The new COVID-19 restrictions will put the economic recovery on ice for the next few months and will prevent the economy from climbing back to its pre-crisis level until the end of 2022. The possibility of even tighter COVID-19 restrictions and …
13th October 2020
As the differences between a Brexit deal and a no deal are not as big as they once were, the economic costs of a no deal have diminished. The bigger risk is that relations between the UK and the EU deteriorate to such an extent that both sides start to …
1st October 2020
Overview – The combination of a large share of the UK’s GDP being generated by the sectors that are hampered the most by social distancing and the drag from the uncertainty caused by Brexit means the UK economy will probably continue to lag behind its …
20th July 2020
Overview – We think it will take the economy a few years to recover from an unprecedented hit to GDP of around 25% triggered by the lockdown implemented to contain the coronavirus. That’s because despite the unparalleled speed and size of the monetary and …
16th April 2020
Overview – We think the economy has turned a corner and that GDP growth will beat the consensus forecast by accelerating from 1.0% this year to 1.8% next year. Of course, the lingering uncertainty over the UK’s future relationship with the EU will hold …
28th January 2020
Overview – Regardless of what happens with Brexit between now and 31 st October, the recent weakening in both the global and domestic data has led us to revise down our GDP growth forecasts in all three of our scenarios based on different Brexit outcomes …
14th October 2019
Overview – As Brexit could dramatically alter the near-term outlook for the economy, we are continuing to publish three sets of forecasts based on different Brexit outcomes (deal, no deal and more delays). But there are three common themes to this …
16th July 2019
