The UK economy

[1andrew1]

Good news for Sunak - the country has narrowly avoided a recession although The Bank of England still expects one this year.
https://www.bbc.co.uk/news/business-64584295

Was going to start a thread on this so I thought I might as well split your post out into a new one instead.

It’s worth noting a couple of extra details here. First, the figure would almost certainly have shown a small amount of growth were it not for strikes in December (the World Cup is also getting some of the blame here - apparently it has messed up spending associated with the domestic season). Second, as it takes two consecutive quarters of negative growth for a technical recession to be identified, the earliest this can now happen is when the spring-summer ‘23 data is released this August. By that time we should see inflation definitely falling and the BoE less inclined to keep hiking interest rates. So, if there is a recession at all (and by the way, third point, not all forecasters agree with the IMF and the BoE that there will be), it will be short and shallow.

[Sephiroth]

Up shit creek nix paddle given the state of taxation and no sensible strategy.

Originally Posted by Sephiroth

Up shit creek nix paddle given the state of taxation and no sensible strategy.

[1andrew1]

The traditional weakness with the UK economy has been low productivity.

In the last few years, we've added lower growth and lower investment than our peers.

Underinvestment isn’t a new blight on the British economy. If you take the postwar period as a whole you’ll find it is every bit a pernicious disease as low productivity.

However, when you look at the FT’s graph, while it shows we could have done better, and maybe should have done, we clearly are still tracking our peer group and not lagging by a country mile. There is room to improve, though it’s unclear whether the clowns in Downing Street have the faintest idea how to bring that about.

[1andrew1]

A couple of good bits of news.

Inflation is forecast to reduce to 2% by the Autumn according to Citigroup.
https://www.telegraph.co.uk/business...b-cuts-brexit/

The UK's budget surplus was £5bn larger than forecast by the Office for Budget Responsibility (OBR)
https://www.theguardian.com/business...e%20ONS%20says.

Yes, a lot of people forget that inflation is measured as year-on-year cost of living increases, so if the costs of goods and services continue to go up, inflation remains high. But if part of the underlying cause of high inflation was temporary volatility, such as in the cost of oil and gas, as has been the case here, then a year later if that volatility has settled down it drops out of the calculation. So it might seem quite dramatic to forecast inflation that low by the end of this year, but unless oil and gas skyrocket again they won’t be exerting inflationary pressure on the economy any more so it’s not as surprising as it looks.