The Macroeconomic Outlook for the United Kingdom

Arnab Bhattacharjee, Benjamin Caswell, Fergus Jimenez-England (), Hailey Low, Monica George Michail, Stephen Millard () and Max Mosley

National Institute UK Economic Outlook, 2024, issue 16, 7-54

Abstract: The recently elected Labour government came to power with the UK economy growing faster than it had done in a while: 0.7 per cent in the first quarter and 0.5 per cent in the second quarter. Since then, a sense of gloom has returned with the GFK consumer confidence index falling from –13 in July and August to –21 in October and the Chancellor pointing to a 'black hole' in the Public Finances of £22 billion. The Budget saw increases in spending, on public consumption and public investment, taxes – including Employer National Insurance Contributions, Capital Gains Tax and Stamp Duty, together with the continued freezing of income tax thresholds – and borrowing. We think the net effect was expansionary and so expect an improvement in growth in the United Kingdom over the next couple of years. Inflation now seems to be under control, although we know that there will be a rise in inflation in October on account of the increase in gas and electricity prices. Unemployment remains low at 4 per cent, although continued issues around the labour market data mean we cannot have complete certainty in this figure. Interest rates are now falling, and we expect further cuts over the coming year. Finally, real incomes continue to rise as wage inflation remains higher than price inflation.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.niesr.ac.uk/publications/subdued-growt ... =uk-economic-outlook

Related works:
Journal Article: The Macroeconomic Outlook for the United Kingdom (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesra:i:16:y:2024:p:7-54

Access Statistics for this article

More articles in National Institute UK Economic Outlook from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC.
Bibliographic data for series maintained by Library & Information Manager ().