A top bank is predicting growth for the UK economy in 2025.
Financial services group ING said that the Government’s £40 billion of spending measures announced in the Autumn Budget is likely to have a stimulatory impact as more money feeds through to public sector wages.
Such predictions are sure to concentrate the minds of people investment planning in Cheshire and the wider economy, given that Britain would compare favourably with other European countries, with gross domestic product (GDP) increasing by 1.4%, compared to growth of just 0.7% in the Eurozone.
Indeed, there is a real possibility that Europe will contract this winter, with an economically ‘anaemic’ Eurozone remaining in recession until the first quarter of 2025 before picking up growth again later in the year. ING is predicting 1.4% and 1.2% growth in quarter three and four respectively.
Complicating matters further, France and Germany, already facing domestic political uncertainty, could be left further exposed given their economic reliance on manufacturing and goods. Any protectionist resumption of trade tariffs by the incoming US administration could therefore have a more significant impact on Europe than on the more service-dependent UK economy.
At home, some economists have expressed concern about the potential for an inflationary spiral, while others have focused on the impact of the hike on National Insurance. However, ING’s James Smith predicts that the growth stimulus provided by additional spending will be a ‘high fiscal multiplier’, equating to around 1.5% of GDP.
