The UK's GDP growth of 0.1% in Q4 2024, while better than expected, highlights persistent issues such as low business and consumer confidence. Anticipated government cuts and tax hikes could further strain the economy. Analysts predict a tough year ahead with 'stagflation' characterized by minimal economic growth and high inflation peaking at 4%. The Bank of England's cautious approach to policy normalization aims to rein in inflation rather than stimulate growth, focusing on the 2% target despite economic challenges.
Despite marginally better than expected GDP figures, the UK economy faces challenges like subdued confidence and looming fiscal measures, indicating a potential 'stagflation' in 2025.
Policymakers need to focus on controlling inflation rather than using rate cuts to support growth, avoiding the risk of embedding high inflation in the economy.
Collection
[
|
...
]