Upgrade to GDP but the UK economy remains flat

June 08 2023

The BRitish CHampers Commerce (BCC) improves Its 2023 GDP forecast at 0.3%, But economic activity will remain weak for the rest of the year, according to the organization’s latest quarterly economic forecast.

UK Economic Outlook

UK economy remains Certainly to avoid technological stagnation. A growth rate of 0.3% is expected throughout 2023, rising to 0.6% in 2024 and 1.0% in 2025.

Business Plan of PCC studies Show that IInflation remains England’s main concern Companies. DHe predicted the CPI ratio remains unchanged from previous 5.0% forecast in Q4 2023.

A slight upward revision to GDP

In the short term, the BCC expects quarterly GDP to remain flat through 2023, with growth of 0.1% in three quarters and no growth in the quarter – leading to overall growth of 0.3% for the year. This is in line with the Bank of England’s forecast, but more optimistic than the OBR’s. The BCC expects the economy to grow by 0.6% in 2024.

Slight upward revision from PCC previous The Q1 forecast of -0.3% to 0.3% is due to recent increases in household spending and overall business investment. Source from Latest BCC Business Surveys The start of 2023 also showed a rebound in business confidence.

However, despite greater political stability, stubbornly high inflation rates and labor market shortages continue to weigh on growth. Export activity has slowed towards the end of 2022 due to global supply chain crises and trade barriers with the EU. had an impact Small exporters. Exports are likely to decline by 4.7% in 2023, a downward revision from 2023. previous forecast.

The latest quarterly economic survey shows a marked improvement in business confidence from 2022 levels. As the BCC now predicts, this is likely to increase investment Commercial Investment is expected to grow 1.3% in 2023, an upward revision from the previously forecast 0.2% level..

inflammation forecast remains Invariably

inflammation remains in the middle A key concern for UK businesses and the forecast for the CPI rate remains unchanged from previous forecast of 5.0% in the 4th quarter of 2023. This is expected to continue and it will decrease to 1.5% in the 4th quarter of 2024.

Average earnings are expected to increase by 4.5% in 2023 Push back Inflation will increase to 2.6% till 2024.

As energy and commodity prices begin to ease, so does core inflation remains Stubborn. The Bank of England interest rate is expected to rise to 4.75% in the second half of 2023. previous The estimate is 4.25%. It is expected to decrease to 4% in 2024 and 3.75% in 2025.

Minor revisions to iNVProperty and housing costs, with government expenditure contracts

Overall investment is expected to increase by 0.7% in 2023 previous The forecast is -1.5%. Household consumption has been revised upwards from -0.4% to 0.2% for 2023. However, government spending is expected to decline significantly by 4.1%. previous 1.8% growth forecast.

The picture for 2024 is more uncertain, with investment forecast to contract by 0.4%. General government spending is also expected to contract again, this time by 1.9% over the year.

A little bit Unemployment rate growth

The labor market is expected to remain tight, with a record number of firms reporting recruitment difficulties in the BCC’s business surveys, particularly in the hospitality, retail and manufacturing sectors. However, some modest growth in the unemployment rate is expected, rising to 4.1% in 2023 and 4.4% in 2024 as vacancies begin to decline.

Commenting on the forecast, Vicky Price, senior member of the PCC Economic Advisory Board, said:

„Today’s FOrist from BCC programs That we There are Of course to do Just narrowly avoid recession. WWith anemic growth rates projected into the future, there is a real risk of slipping back into recession at any time.

„Risk of recession creates goodThere is Uncertainty CompaniesWThe status of Commercial Investment Likely to be Low Although the government sSupport. DMThat figures He will give occupations Small conveniencert, with some Predictions to doing for Very much AssociateNCof Reading About the future state our The economy against an even more challenging international environment.„

David Barrier, Head of Research The British Chambers of Commerce said:

„UK growth expectations have improved slightlying relaxation Politics Turbulence of 2022 and the revival of businessss faith At the beginning of the year.

„However, There is a high level of uncertainty in the UK economy. Most SMEs have consistently reported tough trading conditions over the years Stubbornly high inflation, Record tightness Labor market, and creating trade barriers with the European Union. This is is rated as Very little with developmental stages our Research shows that most companies are still not growing their investment.

„The current trajectory of anemic growth is unlikely to change until there are significant changes in the external environment, particularly in the ability of firms to recruit and export. Enables Companies want Greater access to the skilled people they need, lowering trade barriers and creating a level playing field policy and tax environment will be essential Tap Invest.„

Click here for BCC Quarterly Economic Forecast Infosheet Q2 2023