Your quarterly guide to the UK economy; making sense of the key trends and what's driving them.
Quarterly highlights:
UK economic recovery stays on track
UK GDP rose by a solid 0.7% in Q1 and 0.5% in Q2, following a year of marginal growth over 2023. CBI surveys suggest that growth over the second half of the year will be slower than in recent quarters.
Inflation remained at 2.2% in August
CPI inflation remained at 2.2% in August, reflecting higher air transport inflation. We project that inflation will pick up slightly more in late 2024 due to energy price base effects. Inflation is set to return to the Bank of England’s 2.0% target more sustainably in 2025, reflecting a moderation in domestic price pressures.
Bank of England kept rates unchanged in September
The Bank of England MPC kept the Bank Rate unchanged at 5.00% in September 2024, following a cut in August. Markets currently expect one more 25bp rate reduction this year and for rates to then gradually fall to 3.5% by the
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