Some sectors of the UK economy are clearly struggling, such as manufacturing and particularly areas like chemicals, as they are grappling with high energy prices relative to the US, making them less competitive.
City economists are expecting to learn that the economy shrank by 0.1% in Q4 2024, which would Britain on the brink of a technical recession – defined as two quarterly contractions in a row.
The economy stagnated in July-September, so expectations are that the economy hasn’t grown in the two quarters since Labour won the general election in July.
The cuts may be coming at a slower pace than markets would like, but over time these cumulative cuts should help create a more supportive economic environment for businesses.”.
Interest rates have fallen by 75 basis points from the peak, with the market expecting another 65 basis points of cuts this year.
