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UK Economic Outlook: The Macroeconomic Outlook for the United Kingdom

Author

Listed:
  • Paula Bejarano Carbo
  • Hailey Low
  • Leaza McSorley
  • Stephen Millard
  • Whyte, Kemar

Abstract

As we publish our Summer Economic Outlook, we continue to expect the United Kingdom to steer clear of a recession in 2023. Nevertheless, the country faces a challenging economic outlook as growth remains sluggish and the Bank of England's Monetary Policy Committee (MPC) struggles to tame high inflation. Economic activity has slowed considerably, relative to 2022, as supply chain disruptions and the war in Ukraine exposed the economy to a deterioration in its productive capacity. Momentum remains weak as labour market participation has also declined, mainly on account of rising long-term illness, and aggressive policy rate hikes – needed to tackle high and persistent inflation – have tightened financial conditions. And real personal disposable income, consumption and GDP all remain below their pre-Covid peaks.

Suggested Citation

  • Paula Bejarano Carbo & Hailey Low & Leaza McSorley & Stephen Millard & Whyte, Kemar, 2023. "UK Economic Outlook: The Macroeconomic Outlook for the United Kingdom," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 11, pages 7-44.
    • Handle: RePEc:nsr:niesra:i:11:y:2023:p:7-44
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    References listed on IDEAS

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    1. Joseph Vavra & Erik Hurst & Andreas Fuster & Martin Beraja, 2017. "Regional Heterogeneity and Monetary Policy," 2017 Meeting Papers 270, Society for Economic Dynamics.
    2. Anna Stansbury & Dan Turner & Ed Balls, 2023. "Tackling the UK’s regional economic inequality: binding constraints and avenues for policy intervention," Contemporary Social Science, Taylor & Francis Journals, vol. 18(3-4), pages 318-356, August.
    3. Philip McCann, 2020. "Perceptions of regional inequality and the geography of discontent: insights from the UK," Regional Studies, Taylor & Francis Journals, vol. 54(2), pages 256-267, February.
    4. Bhattacharjee, Arnab & Szendrei, Tibor, 2021. "Box E: Distributional impacts of Covid-19 and potential for policy intervention," National Institute UK Economic Outlook, National Institute of Economic and Social Research, vol. 0(4), pages 41-44.
    5. Bhattacharjee, Arnab & Szendrei, Tibor, 2021. "Box E: Distributional impacts of Covid-19 and potential for policy intervention," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 4, pages 41-44.
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