Many thanks to our hosts at AtkinsRéalis , our guest speaker Lai Wah Co, and all the BusinessLDN members who joined our latest economic briefing with the Bank of England.
Some of the key insights for those not able to join us in person:
- Inflation is on the way down, but with services prices and wage growth still relatively strong, it might bounce around a bit rather than being a straight downward trajectory.
- Assumptions are rate cuts are on the way, and that’s certainly what financial markets are pricing in. But with the first three-way split on the MPC since 2008, it’s still a complex picture with a balance of risks on the upside and downside.
- The UK’s growth outlook has improved since we last got together in November, but with GDP forecasts for the year ahead at only 0.3%, growth prospects remain weak.
- Wage growth is expecting to moderate to around 4% by the end of the year, but will still be stronger than some models are predicting.
- “It’s not easy to recruit, but it’s easier than it has been” nicely sums up state of the labour market.
- We captured the mood music in the room with a few Slido polls…
- Views on demand are mixed. Over half of firms think demand will pick up over the course of 2024; one-third think demand will be broadly flat; and 1 in 10 expect demand to fall compared to last year.
- Expectations that pay awards will track inflation in the region of 3 – 4% was the most popular view, with around two-thirds of firms describing this as their approach.
- And in a year characterised by plenty of political uncertainty, the majority weren’t letting this get in the way of their investment plans and were continuing to invest as planned.
- The bar charts on these are below.
Our next economic briefing takes place on Tuesday, 14 May 2024.
