Skip to main content

Economy will grow slower

According to the EY Item Club's latest forecast, rising inflation and supply chain disruption mean that the economy will grow at a slower pace than expected this year and next. However, the group expects the Bank of England's monetary policy committee to increase the interest rate to 0.25 per cent at its meeting in February rather than next month. However, the report suggests the economy has bounced back from its 9.7 per cent contraction in 2020.

The report also cut its forecast for consumer spending, which had been expected to rise by 4.8 per cent this year and by 7.4 per cent next year, to 3.9 per cent and 6.8 per cent, respectively. It said that it expected inflation to peak at nearly 5 per cent early next year, higher than the 3.5 per cent it had forecast in July, and to remain above 3 per cent until the second half of the year. The economy will grow by 6.9 per cent this year, and by 5.6 per cent next year, it said in its autumn forecast. This is down from its July prediction of growth of 7.6 per cent and 6.5 per cent, respectively, although it would still mean that change this year was the strongest since 1941. Record growth is still forecast, but there are headwinds as we approach the end of the year:

  • Pandemic-related policy support is being withdrawn.

  • Supply chain disruption and shortages have been more severe than expected.

  • The scope for catch-up growth has been run down."

It added that growth would slow to 2.3 per cent in 2023 before stabilising at 1.8 per cent over the following two years. 

Summarised www.sba.tax


 

Labels:

Comments

Post a Comment

Cloud Bookkeeping

H&M struggles with profitability.

  H&M blamed high clothes prices ,  its exit from Rus­sia and a cost-cut­ting pro­gramme for an unex­pec­tedly large col­lapse in its earn­ings as the world’s second-largest fash­ion retailer’s struggles with prof­it­ab­il­ity con­tinue .  Oper­at­ing profit plunged 87 per cent to SKr820mn in the fourth quarter to the end of Novem­ber from a year earlier .  Shares in H&M fell more than 4 per cent to SKr125 . 80 yes­ter­day ,  hav­ing lost nearly half of their value since their recent peak in April 2021 .  The Swedish retailer ,  which lags behind Indi­tex ,  the Span­ish owner of Zara ,  in sales and prof­it­ab­il­ity ,  launched a SKr2bn cost-cut­ting pro­gramme last year that included 1 , 500 job losses . H&M’s sales in the fourth quarter were up 10 per cent to SKr64 . 4bn but flat in local cur­rency terms .  It said sales from Decem­ber 1 to Janu­ary 25 had increased 5 per cent in local cur­ren­cies .  «Sales in ...
2 comments
Read more

Commercial properties continue to fall

  UK commercial property values and rents are projected to «tumble off a cliff edge» in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall. A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the industry in the first three months of the year, with offices falling 3.1 per cent. «Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,» he said. Listed vehicles have already seen this valuation drop in their share prices, with real estates investment trusts such as Land Securities and British Land falling by a fifth or more this year. According to the RIB estate report, offices are expected to suffer the most significant sales price falls, with nearly a third of respondents expecting them to come down by more than 5 per cent. In addition, the survey projected a 1.3 per cent fall in rents per square foot over the perio...
Post a Comment
Read more

BoE is considering to increase deposit guarantee.

  According to anonymous sources, the Bank of England is considering reforming its deposit guarantee scheme. The move comes in response to concerns that the current system may not be sufficient to protect customers in case of a bank failure. The Financial Services Compensation Scheme guarantees deposits up to £85,000 per person per institution. However, some experts have raised concerns that this may not be enough to prevent a run on banks in a significant financial crisis. As a result, the Bank of England is reportedly considering several options for reforming the scheme, including increasing protection and introducing more stringent bank regulations. A final decision on any changes will be made later this year. One option the Bank of England considers is increasing the protection offered by the deposit guarantee scheme. This could involve raising the maximum amount guaranteed per person or extending coverage to more types of deposits. Another possibility is to introduce more stri...
Post a Comment
Read more