UK economic growth to stay muted well into 2024: S&P Global

This fundamental view of the country’s economy remains largely unchanged from S&P Global’s late June forecast.

It has revised its forecast for this year slightly upward, to 0.3 per cent from zero, but downward for 2024 to 0.5 per cent from 0.8 per cent in our previous forecast, shifting some of the slowdown into next year.

Household consumption, which expanded strongly in the second quarter this year, will see a downward correction in the second half of this year.

Headline inflation hardly eased in August and still stood at 6.7 per cent. Despite a small uptick, producer price inflation remains firmly in negative territory and, with the usual delay, should continue to support the downward trend in consumer price growth, S&P Global said in a release.

In the meantime, the impact of tighter financing conditions is already being felt throughout the economy, but still has some way to go before it reaches its full effect.

Real wage growth has turned positive. Together with a labour market that should remain firm by historical standards, this should mitigate an otherwise constrained growth environment.

Although financial markets have remained relatively calm recently, this could change in the event of significant downward surprises at home or abroad relating, for example, to the labour market, the conflict in Ukraine or the housing market.

ALCHEMPro News Desk (DS)