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BCC: QUATERLY ECONOMIC FORECAST Q4 2023
The BCC expects UK GDP growth to flatline for the next three years.
– UK economic growth set to remain sluggish, with growth rate of 0.6% now expected for the whole of 2023, dropping to 0.4% in 2024, and nudging up only slightly to 0.6% in 2025.
– The inflation rate is expected to slow to 4.6% in Q4 2023, revised down slightly from last quarter. The interest rate is expected to have reached its peak but will remain higher for longer.
– Investment and [...]
United Kingdom: Chancellor of the Exchequer delivers Autumn Statement
The economic framework
The independent Office for Budget Responsibility (OBR) forecasts positive growth over the next five years, reaching 0.6% in 2023, 0.7% in 2024 and 1.4% in 2025. The new forecasts show GDP exceeding its pre-Covid level by 1.8%. Inflation should continue to slow, reaching 3.6% in 2024 and 1.8% in 2025 after 7.5% in 2023. It would therefore return to the 2% target in 2025. The unemployment rate is expected to reach 4.6% in 2024 and 2025, compared with 4.2% in 2023. [...]
INFLATIONS REMAINS STUBBORN AS HEADWINDS PERSIST
“Today’s figure, showing the CPI is stuck at 6.7%, shows that inflation for consumers remains stubborn. However, prices in the production sector continue to fall as the PPI rate stands at –2.6%. Our Quarterly Economic Survey has been showing a diminishing percentage of firms expecting their prices to rise for five quarters running, albeit this indicator remains at a high level. But this is just part of the picture, as our research finds that most SMEs [...]
BCC QUARTERLY ECONOMIC SURVEY: INVESTMENT FLATLINING AS INTEREST RATE FEARS CLIMB
Just two fifths of UK firms (41%) now expect their prices to increase in the next three months, down from 55% in Q1.
Labour costs are the biggest driver of price rises, across most sectors, cited by 66% of all businesses.
Domestic sales, cashflow, turnover and profitability indicators are stable but remain at a low level.
Business investment continues its long-term flatlining trend with only 23% [...]
Which countries will benefit most from AI in the global economy?
While the rise of artificial intelligence is now undeniable, it is difficult to anticipate its precise effects on the global economic order – but some trends are emerging. Artificial intelligence will stimulate economic growth in the United States and other developed countries more than in China and the emerging economies, and will strengthen global competition between Washington and Beijing.
These are the findings of a study by British analysts Capital Economics, which ranked [...]
National living wage to rise to £11 an hour, Jeremy Hunt confirms
In a speech to the Conservative Party conference, Jeremy Hunt said the move would benefit two million of the lowest-paid workers. He also promised to review the sanctions regime to ensure “fairness” in the benefits system. The national living wage – as it has been officially called since 2016 – is lowest amount workers aged 23 and over can be paid per hour by law, and is currently £10.42 an hour. There are lower rates for younger workers.
The rates are decided [...]
Bank of England sets out insurance reform to boost investment
The Bank of England on Thursday set out a reform of capital rules for insurers to “unlock tens of billions of pounds” for investments in the economy.
The Solvency II rules were inherited from the European Union and their reform is seen by the insurance industry and by lawmakers who supported Britain’s exit from the bloc as a “Brexit dividend” to unlock billions of pounds of investment.
The so-called matching adjustment seeks to ensure that assets [...]