UK data highlight persistent pressures – inflation stuck at 3.8% (largely due to food costs), GDP slowed to 0.2%, payrolls fell, with wage growth at 4.8%, while retail sales rose in August but sentiment weakened.
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UK growth beat expectations in Q2, while inflation climbed to an 18-month high. The Bank of England cut rates, but future policy looks uncertain. Public borrowing improved, though fiscal pressures mean tax rises are still likely in the autumn.
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Our latest Economic Review looks back on July – the UK economy continues to struggle with weak growth, surprise inflation increases and a cooling jobs market. Despite headwinds, interest rate cuts are still expected as policymakers weigh mixed data and softening demand heading into the second half of 2025.
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Our latest Economic Review looking back on June includes – UK economy Q2 figures, BoE keeps Bank Rate, what will happen in the Autumn Budget and retail sales figures show a sharp drop.
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Our latest Economic Review includes – UK economic growth surprise in Q1, with 0.7% GDP rise. BoE cut rates again, but inflation spiked to 3.5%. Labour market softens with fewer payroll jobs and higher unemployment.
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Our latest Economic Review looking back on April includes – the UK economy returns to growth, inflation eases, strong rise in retail sales, jobs market continues to weaken and the markets at month end.
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Our latest Economic Review includes – the Chancellor’s spending plans were revised in the Spring Statement, a dip in inflation… but for how long, a “modest expansion” in business activity and an unexpected rise in retail sales
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Data released last month by the Office for National Statistics (ONS) revealed that the UK economy unexpectedly grew in the final three months of last year, although more recent survey evidence still points to a sluggish outlook.
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On 29 January, the Chancellor outlined her plan to boost economic growth during a speech in Oxford, although data released last month suggests the UK economy remained largely stalled at the start of this year.
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Release of the latest inflation statistics showed consumer prices are now rising at their fastest rate since March 2024, while last month also saw Bank of England (BoE) policymakers become more divided over the need to cut interest rates.
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Last month, the Bank of England (BoE) cut interest rates for only the second time since 2020 but also warned future reductions were likely to be more gradual due to the prospect of inflation creeping higher next year.
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New economic projections produced by the Office for Budget Responsibility (OBR) suggest the Labour administration’s first Budget will provide only a ‘temporary boost’ to UK economic output.
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An updated forecast published last month by the Organisation for Economic Co-operation and Development (OECD) suggests the UK will be the joint-second fastest growing economy among the G7 nations this year.
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In early August, the Bank of England (BoE) sanctioned the first reduction in interest rates since March 2020 and economists expect a second cut to be announced before the end of this year.
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