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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
  • Dixon, Huw
  • Mosley, Max

Abstract

As we publish our Autumn Economic Outlook, the United Kingdom continues to face a challenging economic outlook as growth remains sluggish and the Bank of England's Monetary Policy Committee (MPC) struggles to tame high inflation. We think economic activity contracted in the third quarter of 2023 and will grow only slightly in the fourth quarter. Momentum remains weak as the war in Ukraine continues and events in Israel and Gaza raise the possibility of a wider conflict in the Middle East. The labour market continues to loosen, with vacancies falling and unemployment rising, while high inactivity on account of long-term sickness remains an issue. Finally, aggressive policy rate hikes – needed to tackle high and persistent inflation – have tightened financial conditions. In a more positive development, real incomes have finally started to rise as wage inflation has overtaken price inflation.

Suggested Citation

  • Paula Bejarano Carbo & Hailey Low & Leaza McSorley & Stephen Millard & Dixon, Huw & Mosley, Max, 2023. "UK Economic Outlook: The Macroeconomic Outlook for the United Kingdom," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 12, pages 7-40.
    • Handle: RePEc:nsr:niesra:i:12:y:2023:p:7-40
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    References listed on IDEAS

    as
    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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