UK GDP 2024 Q4: A Tiny Upswing That Still Leaves Us Feeling Neutral
So folks, the latest numbers for the last quarter of 2024 show the UK economy nudging forward with a five‑tenths‑point profit: 0.1% QoQ growth. Not exactly a fireworks display, but it’s a measly win over the bumpy expectations.
Why It Doesn’t Make Us Do a Happy Dance
When growth is so “meh”, scepticism sticks around. The headline hack? The outlook for the rest of the year is largely unchanged – a slow‑pacing economy with the occasional sting of inflation. No large blankets for the economic forecast.
New Year, New Fuss
- Business confidence is still sniff‑negative.
- Consumer confidence remains in the down‑drift lane.
- And yeah, the looming Spring Statement is whispering about more tax hikes or spending cuts.
The Biggest Threat on the Horizon
Things could go sideways if companies feel the sharp jump in National Insurance contributions come April. That’ll be a bummer on top of the core problem: low fuel (the “low pent-up demand” slump) and stubborn inflation.
2025: A “Stagflation” Year? The Forecast
Our gut feeling (plus the numbers) still points to a year where growth stays near‑zero, while inflation sticks stubbornly at around 4% during the autumn. The Bank of England is already nudging that high‑inflation peak.
Monetary Policy: The Slow, Predictable Tango
Given the climate, cracking open rates more aggressively would be a rookie mistake. We’re talking the same classic 25 basis point cuts every quarter, which keeps the process transparent.
By the end of the year, the BoE’s policy rate should settle at 3.75%. Follow that up with three more smoothing moves aligned with the next round of economic forecasts.
Why Not Fast‑Forward?
Jumping too fast towards normalising rates risks smuggling that high inflation in, making it a more grounded problem later. The Monetary Policy Committee’s mandate is to get inflation back to that sweet spot of 2% – not to wrestle dead‑weight growth.
In short, letting the BoE outpace the usual rhythm would make the fiscal missteps of the government look even more blamable.
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