While the 0.1% q/q rise in GDP in Q4 of last year was stronger than we and most other forecasters expected, the combination of higher taxes for businesses announced in last October’s Budget, a lingering drag from the previous interest rate hikes and softer overseas demand means we have become more pessimistic about the outlook for the economy. As a result, we think GDP will grow by only 0.7% this year, which leaves us a bit below the consensus forecast of more than 1.0%.
We will be previewing the Chancellor’s upcoming fiscal update in a 20-minute online Drop-In at 3pm GMT on Wednesday 12th March. (Register here.)
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