How will the UK economy perform in 2024 and 2025?

Economy growth

Three respected economic bodies have recently issued growth projections for the UK economy.

Gross Domestic Product (GDP), the standard measure of the size of a country’s economy, is forecast to increase only slightly during this year and by a little more next year. This is better than the last half of 2023, when the UK had a small technical recession (i.e. two consecutive quarters of negative GDP).

In early May, the Organisation for Economic Cooperation and Development (OECD) forecast that GDP will increase by 0.4% in 2024 and 1.0% in 2025. The 2024 projection is worse than those for other G7 countries, except Germany (0.2%). The 2025 figure is the lowest of all G7 countries, although not by much, with most of them in the range 1.1% to 1.3%.

In April, the International Monetary Fund (IMF) gave higher forecasts for UK GDP, showing a growth of 0.5% in 2024 and of 1.5% in 2025. Whilst the 2024 projection still leaves the UK second from bottom in the G7, the 2025 figure ranks the UK third in the G7, behind only the USA and Canada.

Projections issued in March by the Office of Budget Responsibility (OBR) are the highest of the three, forecasting GDP growth of 0.8% in 2024 and 1.9% in 2025. Economic analysts have forecasted an increase of 0.4% for the first quarter of 2024.

Based in Chester and Oswestry, Hartey Wealth Management provides a range of investment management services and advice which take account of economic conditions.

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