Happy New Year.
We hope you had a relaxed and peaceful Christmas with time to reflect.
We’ve been looking at the various predictions for the UK economy for 2025 and this is what we’ve found.
According to rmsus “Global growth in 2025 will expand at a modest 2.5% pace as the sluggish recovery from the pandemic continues, according to our forecast.
“Developed economies will most likely experience growth between 1.25% and 1.75%, compared with a 3.5% to 4% rate in emerging economies.”
But what of the UK?
Speaking to the FT, London Business School’s Dr Linda Yueh is asked whether the UK will still have an inflation problem at the end of 2025.
Dr Yueh said that it is possible that inflation will not be at the two per cent target at the end of 2025, adding that the “larger problem is that the level of prices, in contrast to the rate of inflation, will still be significantly higher than before the pandemic.
Meanwhile, the BCC (British Chambers of Commerce) produced a quarterly report at the end of December in which it was cautiously optimistic predicting marginally improved GDP expectations for 2025 and 2026.
“Increased government spending is likely to boost GDP, however business investment and trade are likely to suffer in 2025.
“Growth has been revised upwards for the next two years – with 1.3% expected in 2025 and 1.5% in 2026, higher than previous forecast (1.0% and 1.1%). Upgrades to 2025 and 2026 are driven by increased levels of government spending, but the overall growth landscape remains relatively weak.
“The rise in employer national insurance contributions, announced at the Budget, has had a small impact on the forecast – including average earnings and unemployment.
“The outlook for trade is expected to remain challenging due to trade barriers with the EU, global conflicts and the threat of tariffs.”
So, VERY cautious optimism from the BCC, with caveats.
How about you?
Are you optimistic or pessimistic about your business in 2025?