As the UK anticipates January's GDP data, concerns loom over potential economic decline beginning in April 2025 when new tax policies take effect. Business owners and economists express that while GDP may show slight growth, looming tax increases may push the economy into a deeper malaise. Predictions indicate minimal growth for January, reflecting stagnation across various sectors. Tax hikes, alongside rising utility costs, threaten to exacerbate inflation and could force the Bank of England to reconsider interest rates, posing further risks to economic stability.
At best, Friday's MOT on the UK economy will show lots of advisory notes; at worst, the car will be ready for salvage by the end of the second quarter once the tax rises hit home.
While Friday's GDP data will provide a snapshot of the UK at the start of 2025, the real reckoning is expected in April when Labour's fiscal policy kicks in.
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