Larger-than-expected dip in economic activity set to pile pressure on PM Sunak
15 February 2024
Amid a raft of economic releases in the UK this morning the one that will grab the headlines is the not-too-surprising fact that the UK economy fell into a technical recession in the fourth quarter of 2023. Gross Domestic Product (GDP) fell 0.3% in the quarter compared to three months earlier, slightly worse than estimates of a 0.1% fall.
However, hopes for the Bank of England to hit the emergency rate cutting pedal may be unwarranted. The economy has likely recovered a bit from the middle of last quarter’s malaise according to recent data and it is still the Bank’s focus to squash inflation, almost at the expense of economic growth. The adage of voters getting the government they deserve seems frivolous, but this is the slow to no-growth post-Brexit alternate universe we find ourselves in, despite Prime Minister Sunak’s failed pledge to grow the economy. Today’s twin by-elections will show whether the Tories can defend their seats or whether voters really have had enough.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.