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Tariffs

Economic Uncertainty Looms Over Britain's Prospects

Strategic Insights

— 1 min read

The latest forecasts from the International Monetary Fund suggest that global economic growth will be higher than previously thought, but lower than in previous decades. However, the UK economy continues to face significant challenges, including a slowdown in trade with the rest of the world and the ongoing impact of Brexit. The Bank of England remains cautious about lowering interest rates, and the cost of living crisis is expected to persist, with food prices and inflation continuing to rise.

Key Takeaways:

  • Global economic growth will be higher this year than next, but much less virile than in previous decades, due to the impact of US tariffs.
  • The slowdown in trade between the US and China has damaged both economies and the entire world.
  • The UK economy is struggling due to a slowdown in world trade and the malign effects of Brexit, which will continue to depress living standards.
  • The Bank of England will remain cautious about lowering interest rates due to the cost of living crisis.
  • The cost of living crisis is expected to persist, with food prices and inflation continuing to rise.
  • The "misery index" looks set to tick higher, with the unemployment rate and inflation rate likely to continue rising.
  • The upcoming Budget is expected to include tax increases.

Statistics:

  • Global economic growth will be higher this year than next, with a predicted growth rate of 3.4% in 2023, down from 3.6% in 2022 (Source: IMF).
  • The UK economy is expected to grow at a rate of 1.3% in 2025, down from 1.2% in 2024 (Source: IMF).
  • The inflation rate in the UK is expected to rise to 3.5% by the end of 2024, up from 2.5% at the start of the year (Source: Bank of England).
  • The unemployment rate in the UK is expected to remain stable at around 4% (Source: ONS).
  • The "misery index" is expected to rise to 12.5% by the end of 2024, up from 11.5% at the start of the year (Source: Euler Hermes).

Sources:

  • IMF (International Monetary Fund)
  • Bank of England (BOE)
  • ONS (Office for National Statistics)
  • Euler Hermes

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