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United Kingdom: Country Economic Forecast 2012

19 January 2010
by marketresearch -- last modified 28 July 2012

This report contains detailed economic forecasts and analysis for the United Kingdom. After underlying growth is expected to strengthen gradually, confidence rises and the external outlook improves. GDP is forecast to grow by 0.6% this year.


Price EUR 141.39
Publisher Oxford Economics
Publication date 17 April 2012
Available from Dispatched and sold by marketresearch.

Abstract

 

With a few notable exceptions, activity data in the UK have continued to strengthen over the past month and it is estimated that GDP grew by around 0.4% in 2012Q1. The reasons for the upturn are twofold. First, confidence has stabilised following the policy intervention around the turn of the year from the Bank of England and the ECB. Second, the UK has benefited from the improved performance of the US and emerging markets, with exports to these areas accelerating strongly and offsetting the weakness of demand from the Eurozone. Headline growth rates are likely to continue to be volatile through 2012, with Q2 expected to see a drop in GDP because of an extra bank holiday but Q3 likely to see a strong rebound due to the catch-up and the boost from hosting the Olympic Games. But underlying growth is expected to strengthen gradually as the squeeze on real wages eases, confidence rises and the external outlook improves. GDP is forecast to grow by 0.6% this year and by 1.7% in 2013, although the risks remain skewed to the downside. The Budget saw the overall fiscal policy stance left unchanged, but the Chancellor made some encouraging moves towards improving the tax climate for business, in the hope that it will spur the corporate sector to play a greater role in the recovery. Measures included a further reduction in the main rate of corporation tax and a cut in the top rate of income tax.



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