Page 4 - Uk Economy

UK inflation in surprise fall in Aug, though BoE still set to raise rates

Inflation in Britain fell unexpectedly in August to its lowest level since the start of Russia's invasion of Ukraine, which led to sharp rises in energy and food costs. The Office for National Statistics said Wednesday that inflation, as measured by the consumer prices index was 6.7 per cent in August this year, down from 6.8 per cent in July. The decline took inflation to its lowest level since February 2022. It said that lower hotel and air fare costs and a moderation in food price rises helped offset an increase in energy prices on the back of higher crude oil prices. The decline was unexpected. Most analysts had expected an increase to around 7 per cent. Though the surprise decline was encouraging, inflation remains way above the Bank of England's target rate of 2 per cent and most economists think it will raise its main borrowing rate once again on Thursday by a quarter of a percentage point to a near 16-year high of 5.5 per cent. Like other central banks around the world, th

Only recession can tame West's inflation, says adviser to UK chancellor

While European Central Bank President Christine Lagarde and Powell offered few clues about their next steps at their upcoming decisions, each signaled ongoing concern about prices

UK heads for 5-yr of lost economic growth as goal to 'level up' fails

The forecasts echo the Bank of England's gloom, which said last week that GDP would remain below pre-pandemic levels "in the medium term"

UK economy may fall further behind euro area next year, forecast suggests

Gross domestic product is expected to grow by 0.6% in 2024, well below the 1% gain anticipated in the euro area, a monthly survey of economists by Bloomberg showed

London workers more gloomy about prospects of finding a new job: Report

About 38% of people in London said they were "not confident" about their ability to find another job in three months if they lost the one they had, according to a survey by Deltapoll

Bank of England hikes rates to 5% to tackle inflation, highest since 2008

MPC members Silvana Tenreyro and Swati Dhingra opposed the rate rise - as they have all others this year - saying that much of the impact of past tightening had yet to be felt

UK economy recovers slightly in April but strikes to keep lid on growth

The British economy bounced back in April amid strong sales at bars and pubs as well as a rebound in car purchases, according to official figures. The Office for National Statistics said on Wednesday that the economy grew by 0.2 per cent during the month. The increase was in line with expectations but failed to fully recoup the 0.3 er cent contraction in March. However, on a longer-term horizon, the British economy is barely growing, hobbled by higher interest rates as well as strike action across an array of sectors, including in health, education and transportation. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he expects second-quarter growth to be unchanged from the first as the strikes rumble on. He also predicted that the extra public holiday in May for King Charles III's coronation to weigh on economic activity. Further out, he expects lower energy prices for households to boost growth in the second half of the year. A slow but steady recovery should eme

UK economy will avoid recession this year but inflation still a worry: IMF

The British economy will avoid falling into recession this year, according to upgraded growth forecasts Tuesday from the International Monetary Fund. In its latest assessment of the U.K. economy, the Washington-based fund said domestic demand had proven more resilient than anticipated in the face of the surge in energy costs. The IMF now thinks the British economy will grow by 0.4 per cent this year, up from its previous prediction of a 0.3 per cent decline. The forecast aligns with that from the Bank of England, which also upgraded its economic outlook this month. However, the IMF said inflation is likely to remain stubbornly high over the coming years and only return to the Bank of England's target of 2 per cent in mid-2025, six months longer than it predicted earlier this year. Like other central banks, the Bank of England has been raising interest rates aggressively over the past 18 months or so after inflation spiked sharply, first because of bottlenecks caused by the coronavi

UK economy grows sluggishly in Q1 as inflation curbs consumers spending

The UK economy grew sluggishly during the first three months of the year as double-digit inflation curbed consumer spending and labour unrest curtailed output in industries ranging from transportation to healthcare and education. Gross domestic product, the broadest measure of economic activity, increased 0.1 per cent in the first quarter compared with the previous three months, the Office for National Statistics said Friday. The figure matched the growth rate during the fourth quarter of last year and was in line with economic forecasts. The figures come a day after the Bank of England approved a 12th consecutive interest rate increase as it struggles to curb inflation that has remained at around 10 per cent since July. The bank also upgraded its economic outlook, saying the underlying picture is more positive than it was earlier this year. Let's be clear, whilst the Bank of England may believe the UK economy will now avoid the predicted recession entirely, the country is not in g

King Charles' coronation: Will the tradition benefit or burden UK economy?

That day off will help drive a 0.7% fall in GDP in May, according to Bloomberg Economics

Royalty burden? King's coronation may tip UK economy into contraction in Q2

Forecasters warned that the additional day off on May 8 will help trigger a 0.7% slide in GDP in May and could tip the economy into a minor contraction in the second quarter

Long-term sickness costing UK economy GBP 43 bn a year, finds study

"UK economy faces a series of overlapping crises: low productivity, low growth, widening inequality and an historic fall in living standards."

UK economy set for smaller hit in 2023 than previously feared: IMF

British gross domestic product will contract by 0.3% in 2023, the IMF said in its latest set of global forecasts, a smaller shrinkage than the 0.6% contraction the Fund predicted in January

UK inflation jumps to 10.4% for the first time, surprising analysts

Britain's inflation rate rose for the first time in four months in February, surprising an analysts and increasing pressure on the Bank of England to raise interest rates at its meeting on Thursday. The consumer price index jumped to 10.4 per cent in the 12 months through February from 10.1 per cent the previous month, as high energy prices continued to squeeze household budgets, the Office for National Statistics said Wednesday. While economists expect prices to drop rapidly later this year, inflation is more than five times higher than the Bank of England's 2 per cent target. The central bank will weigh the need to control inflation against concerns about the fallout from global banking troubles when it decides whether to raise interest rates on Thursday. The bank has approved 10 consecutive rate increases since December 2021, pushing its key bank rate to 4 per cent. Michael Hewson, chief analyst at CMC Markets UK, said he expects the Bank of England to raise rates by at least a

UK reveals measures to boost economy, eases cost-of-living burden

The UK has unveiled a clutch of measures to boost its struggling economy, including childcare reforms, tax cuts for businesses, and policies to ease the cost-of-living burden for households

UK set for biggest strike in years as teachers, civil servants walk out

Between June and November, more days were lost to industrial action than in any six months for over 30 years, according to official data

Britain only major industrialised country to see its economy shrink in 2023

Britain is expected to be the only major industrialised country to see its economy shrink this year after the impact of Liz Truss' brief premiership prompted a sharp growth downgrade from IMF

UK economy grows unexpectedly in Nov by 0.1% amid strong services

The UK economy grew unexpectedly in November as the tight job market increased demand for employment services and soccer's World Cup boosted hospitality. Gross domestic product, the broadest measure of economic activity, increased 0.1 per cent from the previous month, the Office for National Statistics said on Friday. That beat the expectations of economists, who had forecast a 0.2 per cent contraction. Despite the better-than-expected figures, the ONS says monthly GDP estimates should be treated with caution because they are more volatile than quarterly data. Economists are waiting for the release of fourth-quarter GDP data next month, which will show whether the British economy shrank from a second consecutive quarter in the three months through December. Two quarters of negative growth is one definition of a recession. November's expansion was driven by a 2 per cent growth in administrative and support activities, with employment services growing 2.1 per cent, the ONS said. ...

UK government meets trade unions but fails to end wave of strikes

UK government ministers met trade union leaders on Monday but fell short of ending a wave of strikes that has hobbled the rail network and strained the overburdened health system. There were small signs of progress but no breakthrough after a meeting between Health Secretary Steve Barclay and health care unions. Other ministers met with railway unions that have staged months of strikes, and teaching unions considering classroom walkouts. Barclay said the talks had made progress and the government wanted "to work constructively with the trade unions. There was definitely a change of tone today," said Sarah Gorton of UNISON, which represents some health workers. However Onay Kasab, negotiator for the Unite union, said the talks had been a missed opportunity. Unions said strikes by nurses and ambulance staff planned for this month would go ahead. Nurses are due to walk out on Wednesday, and ambulance workers next week, while junior doctors are voting on whether to strike later this ..

UK is halfway through squeeze that will cut incomes by £2,000: Report

The findings add to a bleak outlook for UK households after inflation jumped to double digits