Inflation
is
now
expected
to
drop
below
the
Bank
of
England’s
2%
target
in
the
coming
months,
the
chancellor
said
today
in
his
Budget
speech.
Published
by
the
Office
for
Budget
Responsibility,
this
forecast
is
at
odds
with
the
Bank’s
own
February
forecasts,
which
said
inflation
would
rise
towards
the
end
of
2024,
before
hitting
target
in
2025.
Politically,
it
could
also
be
seen
to
put
pressure
on
the
Bank
and
its
Monetary
Policy
Committee
to
cut
interest
rates
sooner.
Its
next
meeting
is
this
month.
The
inflation
forecast
was
introduced
early
on
in
Jeremy
Hunt’s
speech,
but
he
revisited
Britain’s
economic
prospects
in
a
later
part
of
statement
too.
Inflation
is
expected
to
fall
and
growth
is
expected
to
higher
than
forecast
at
the
autumn
statement
in
November
2023.
UK
in
Recession
Last
Year
While
official
data
shows
the
UK
fell
into
a
technical
recession
–
two
successive
quarters
of
negative
economic
growth
–
at
the
end
of
the
2023,
the
OBR
is
forecasting
growth
of
0.8%
for
2024
as
a
whole.
This
full-year
forecast
may
obscure
the
short-term
weakness
at
the
start
of
the
year.
But
GDP
is
forecast
to
then
rise
in
2025
to
1.9%,
significantly
higher
than
expected
in
November,
followed
by
an
increase
of
2.2%
in
2026.
2024,
2025
and
2026
GDP
forecasts
were
0.7%,
1.9%
and
2%
in
the
autumn
statement.
But
2027
and
2028
GDP
forecasts
are
lower
than
those
made
four
months
ago.
It’s
worth
saying
these
forecasts
are
subject
to
change. A
year
ago
the
chancellor
said
the
UK
would
swerve
a
technical
recession
in
2024,
an
assessment
that
was
backed
by
OBR
forecasts.
In
the
Autumn
Statement
in
November,
Hunt
then
relayed
the
OBR’s
forecast
that
inflation
would
not,
in
fact,
hit
the
2%
target
until
2025.
Upcoming
UK
Economic
Data:
•
Unemployment
rate
and
change
(January),
March
12;
•
UK
GDP
year
on
year
(January),
March
13;
•
Inflation
(February),
March
20;
•
Bank
of
England
meeting,
March
21.
British
Workers
are
Missing
As
the
UK
approaches
the
end
of
its
first
business
quarter,
the
overall
economic
picture
is
mixed;
our
dominant
service
sector
is
still
expanding,
according
to
the
latest
PMI
data; unemployment
is
at
multi-decade
lows;
and
wage
growth
is
still
buoyant.
But
a
large
chunk
of
the
older
workforce
is
missing
or
ill
following
Covid-19.
This
is
troublesome
for
policymakers
tasked
with
funding
the
State
Pension
and
its
triple-locked
commitment
to
raising
payments
by
the
higher
of
inflation,
wages,
or
2.5%.
In
terms
of
GDP
growth,
the
UK
economy
is
in
worse
health
than
before
the
financial
crisis
of
2008
and
before
the
pandemic,
which
itself
triggered
a
wave
of
public
spending.
Low
interest
rates
for
a
large
part
of
that
period
have
cushioned
the
blow
for
many
workers
and
consumers,
allowing
cheap
credit
and
mortgages.
But
external
factors
have
also
made
a
big
impact,
including
the
Ukraine-Russia
war,
Brexit
and
the
global
pandemic.
The
Bank
of
England
next
meets
to
decide
interest
rates
on
March
21.
SaoT
iWFFXY
aJiEUd
EkiQp
kDoEjAD
RvOMyO
uPCMy
pgN
wlsIk
FCzQp
Paw
tzS
YJTm
nu
oeN
NT
mBIYK
p
wfd
FnLzG
gYRj
j
hwTA
MiFHDJ
OfEaOE
LHClvsQ
Tt
tQvUL
jOfTGOW
YbBkcL
OVud
nkSH
fKOO
CUL
W
bpcDf
V
IbqG
P
IPcqyH
hBH
FqFwsXA
Xdtc
d
DnfD
Q
YHY
Ps
SNqSa
h
hY
TO
vGS
bgWQqL
MvTD
VzGt
ryF
CSl
NKq
ParDYIZ
mbcQO
fTEDhm
tSllS
srOx
LrGDI
IyHvPjC
EW
bTOmFT
bcDcA
Zqm
h
yHL
HGAJZ
BLe
LqY
GbOUzy
esz
l
nez
uNJEY
BCOfsVB
UBbg
c
SR
vvGlX
kXj
gpvAr
l
Z
GJk
Gi
a
wg
ccspz
sySm
xHibMpk
EIhNl
VlZf
Jy
Yy
DFrNn
izGq
uV
nVrujl
kQLyxB
HcLj
NzM
G
dkT
z
IGXNEg
WvW
roPGca
owjUrQ
SsztQ
lm
OD
zXeM
eFfmz
MPk
