2 Aug 2022 UK Monitor Forecast Review: Fiscal Policy and Lower Saving Likely to Avert Recession

Samuel Tombs (UK Economist)29th Jul 2022 15:50U.K., Daily Monitor

We have revised up our forecast for Q4 CPI inflation by 1.0pp since early July; energy prices have surged again.

But we have revised down our forecast for the level of GDP by only 0.5pp in Q4; fiscal policy will respond.

People also have shown more willingness to deplete savings; we still expect a recession to be narrowly avoided.

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April August bank rate bill budget buyer demand car sales commodity commodity prices construction construction pmi cpi cpi inflation credit credit data deposits easing economy electricity electricity prices energy energy prices fiscal policy forecasts ftse funds gdp gilt government growth growth rate headline rate headline unemployment house prices households housing income inflation inflation expectations January job market jobs July July forecast June labour labour demand low income households manufacturing manufacturing pmi March May money and credit data mortgage mortgage rates mpc natural gas obr October Ofgem ONS output balance pmi policy psnb q1 q2 q3 q4 q4 cpi real gdp real incomes recession remain savings services pmi Spring Statement supply survey tariff tax taxes unemployment unemployment rate vat wages

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