Hope for economic growth dampened by uncertainty

Fun fact: the OECD still predicts that Britain's economy will be one of the stars of the G7 during 2025 with growth of 1.7 per cent, lagging only behind the US at 2.4 per cent.

- JAMES MOORE

I wonder how long it is before that forecast gets revised downwards. City economists are pencilling in something more like 1.3 per cent but some big guns, such as Goldman Sachs, come in even lower (1.2 per cent).

Labour’s tax-raising budget, and particularly the decision to raise £24bn by hiking employer national insurance contributions (NICs) looms large over UK plc. It played a role in the Bank of England predicting zero growth for the final quarter of 2024 even though the nasties don’t actually come into force until April.

True, you still have to be something of a Jeremiah to be talking about recession. But some people are.

Forward-looking indicators are less than positive. The most recent composite Purchasing Managers Index (PMI) rolled in at 50.5, barely in positive territory with anything above 50 indicating growth.

This chimes with the various surveys of business confidence, which have been showing a decline. The Institute for Chartered Accountants in England & Wales (ICAEW) monitor found a dip in the third quarter of the year to plus 14.4. That is high by historic standards but note that it came before the Budget.