A General View of People Visiting The Trafalgar Tavern Pub Decorated With Bunting and String Lights on the Bank of the River Thames in Greenwich on December 16, 2023 in London, United Kingdom.
John Keeble | Getty Images News | Getty Images
The UK Economy Grew by 0.1% in the fourth Quarter, Beating Expectations, According to a Preliminary Estimate from the UK’s Office for National Statistics (ons) on Try.
Economists Pollled by Reuters Had Expected The Country’s GDP to Contract by 0.1% over the period.
The services and construction sector contributed to the better-tha-exposed performance in the economy, up 0.2% and 0.5% respectively, but production fell by 0.8%, The ons said.
The British economy had recorded zero growth in the Third Quarter and Lackluster Monthly GDP Data Since then, with a 0.1% Contraction in October and A 0.1% expansion in NovemberThe ons said on Thursday that growth had picked up in December, with an estimated 0.4% month-on-month expansion thanks to growth in services and production.
The British pound was up 0.4% against the dollar after the data release, and flat against the euro.
Sluggish growth and a recent drop in inflation Prompted the bank of england last week to make its first interest rate of the yearBringing its benchmark rate down to 4.5%.
The Tentral Bank Signaled Further Rate Trims Wane as Inflationary Pressures Wane, but noted that Higher Global Energy Costs and Regulated Price Changes are Expected to Push L 25, “even as underling domestic inflationary pressures are Expected to wane further. ” The boe expected the inflation rate to fall back to its 2% target by 2027,
The Central Bank also Halved The UK’s Economic Growth Forecast from 1.5% to 0.75% this year.
Poor Economic Performance Will Stack Additional Pressure on Uk Chancellor Rachel reeves, whose fiscal plansAnnounced Last Fall, Have Been Criticized for Increasing The Tax Burden on British Businesses. Critics say the plans, which increase the Amount that employees pay out in National Insurance (NI) Contributions – a tax on earnings – as well as a hike to the national minimum Wage, COLLD HARMAMUMUMUNG, COLLD HARMAMUMUMMUNS
Chancellor reeves defended the “Autumn Budget,” Saying Its £ 40 billion of tax rises was needed to fund public spending and that she is prioritizing economy.
Responding to the latest growth data twinsday, reeves said the government was “removing the barriers that get in the way of businesses who want to expand.”
2025 growth downgraded
Economists had widely expected the british economy to end the year on a low note and have also also downgraded their growth forecasts for 2025.
“Higher Taxes for Businesses, A Lingering Drag from the Previous Interest Rate Hikes and Softer Overseas Demand Explain whose We have Revised Down OK GDP Growth Forecasts, from 1.3% to 0.66 % to 1.5% for 2026, ” Paul Dals, Chief Uk Economist at Capital Economics, said in a note this week.
City of London Skyline View Looking Over the River Thames and Waterloo Bridge at Sunset on 10th February 2024 in London, United Kingdom.
Mike Kemp | In pictures | Getty Images
Sanjay Raja, Senior Economist at Deutsche Bank, Concurred, Saying that Near-Term Downgrades to the UK’s 2025 Growth Outlook Were “Inevitable.”
“Bar Any Major Revisions, The Negative Carry Over Effect from 25 Percentage Points – At Minimum, “He said in a research note this week.
“There’s more bad news too. Survey data to start the year have also yet to show any bounce back. Downside risks to our first quarter of 2025 GDP growth forecast (of 0.3% quarter-on-quarter growth) are rising with the latest PMI Data pointing to only a modest rebound to start the year.
“To be sure, trade uncertainty will remove for some time,” He added.
Threat of tarifs
Us President Donald Trump Threated to Impose Tariffs Could Strike a Deal to avoid Levis.
The UK is certainly Hopeful that it can avoid trump’s tariff wrath, with reeves talling cnbc last month that The UK is “Not Part of the Problem” When it comes to “Persistent” Trade deficits that the President Wants to Tackle.
Us President Donald Trump Inspected An Honor Guard during a welcome ceremony at buckingham Palace in Central London on June 3, 2019, on the first day of their three-day state staysit to the uk
Mandel Ngan | AFP | Getty Images
Last Week, The Bank of England Stated that Any Potential Us Tariffs sion channels. “
“Most of these channels would act to lower uk economic activity.
Lower Us Demand for UK Exports would be disinflation, for example, but supply chain disrups due to missing components clock lead to short-term price spikes, the boy noted.
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