The Bank of England has significantly revised its forecasts, halving its GDP growth estimate for 2024 to 0.75% and predicting inflation to peak at 3.7%, almost double its target. This confluence of slower growth and rising inflation complicates the fiscal strategy of Chancellor Rachel Reeves, particularly as the economy narrowly avoids recession. The outlook of declining productivity may prompt the Office for Budget Responsibility to downgrade its previous growth forecasts, adding pressure on government financial plans and contrasting sharply with Reeves's optimistic messaging.
Stagflation fears are rippling through the City today after the Bank of England slashed its growth forecasts on Thursday, lifting its inflation forecast.
The Bank predicted inflation would peak at 3.7% later this year, nearly twice its 2% target, as rising energy prices push up the cost of living.
Collection
[
|
...
]