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UK Economic Outlook: The Macroeconomic Outlook for the United Kingdom

Author

Listed:
  • Paula Bejarano Carbo
  • Hailey Low
  • Ben Caswell
  • Stephen Millard
  • Monica George Michail
  • Max Mosley
Abstract
As we enter 2024, it looks like the UK economy is recovering after the slight falls in GDP in the third and fourth quarters of 2023: 0.1 and 0.3 per cent, respectively. That said, the overall picture of low growth in the United Kingdom, which – barring the bounce back from the Covid-19 pandemic – we have seen for much of the past decade, continues. Momentum remains weak as the war in Ukraine continues and recent events in the Middle East have raised the possibility of a wider conflict involving Israel and Iran. The UK labour market continues to loosen, with vacancies falling and unemployment rising, while high inactivity on account of long-term sickness remains an issue. On the bright side, the aggressive policy rate hikes have resulted in inflation falling close to target (and likely below target in the second quarter of 2024) and, as a result, real incomes continue to rise as wage inflation remains higher than price inflation.

Suggested Citation

  • Paula Bejarano Carbo & Hailey Low & Ben Caswell & Stephen Millard & Monica George Michail & Max Mosley, 2024. "UK Economic Outlook: The Macroeconomic Outlook for the United Kingdom," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 14, pages 7-47.
    • Handle: RePEc:nsr:niesra:i:14:y:2024:p:7-47
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    References listed on IDEAS

    as
    1. Martin Beraja & Andreas Fuster & Erik Hurst & Joseph Vavra, 2017. "Regional Heterogeneity and Monetary Policy," NBER Working Papers 23270, National Bureau of Economic Research, Inc.
    2. Anna Stansbury & Dan Turner & Ed Balls, 2023. "Tackling the UK’s regional economic inequality: binding constraints and avenues for policy intervention," Contemporary Social Science, Taylor & Francis Journals, vol. 18(3-4), pages 318-356, August.
    3. Bhattacharjee, Arnab & Szendrei, Tibor, 2021. "Box E: Distributional impacts of Covid-19 and potential for policy intervention," National Institute UK Economic Outlook, National Institute of Economic and Social Research, vol. 0(4), pages 41-44.
    4. Philip McCann, 2020. "Perceptions of regional inequality and the geography of discontent: insights from the UK," Regional Studies, Taylor & Francis Journals, vol. 54(2), pages 256-267, February.
    5. Bhattacharjee, Arnab & Szendrei, Tibor, 2021. "Box E: Distributional impacts of Covid-19 and potential for policy intervention," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 4, pages 41-44.
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