abrdn: Signals that the UK economy is recovering

abrdn: Signals that the UK economy is recovering

28 maart 2024

Verenigd Koninkrijk
Engeland.jpg

Luke Bartholomew, Senior Economist at abrdn, comments on the revised GDP data released today by the Office for National Statistics:

'Today’s revised figures confirm what we already knew: the UK economy has been going through a rough patch. A lot of attention will focus on the binary question of recession or not. But given the somewhat arbitrary definition of a 'technical recession', the fact that the UK economy was indeed in a recession in the second half of last year is perhaps less interesting than the prolonged period of very weak growth that data points to. And when adjusted for changes in population, the picture is even more downbeat for living standards.

However, there are now signs that the economy is starting to recover. Real income growth has turned positive as inflation has fallen sharply, and we are perhaps past the peak impact of higher interest rates. Indeed, we think the Bank of England will be cutting interest rates through the second half of this year as policy increasingly moves on from the fight against inflation to focusing on reviving the UK’s weak growth performance.'

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