In 2024, UK household incomes are expected to improve significantly, marking a potential “turning point” for the country’s stable economy. This positive outlook is due to expected interest rate cuts, tax cuts, and lower inflation, as reported recently.
UK growth forecast in 2024
Ernst & Young’s Item Club has revised its forecast for UK economic growth this year, increasing it from 0.7% to 0.9%, compared to the previous forecast issued in October.
According to EY’s latest economic forecasts, there is an expected acceleration in growth next year, with a potential rise in GDP (gross domestic productTo 1.8% compared to previous expectations of 1.7%.
“Lower inflation and lower market interest rates, coupled with the prospect of additional tax cuts in the Chancellor’s Spring Budget, suggest that the UK is at a turning point in 2024 and on the cusp of entering a more positive phase of growth,” stressed Hywel Ball, EY Chairman. United kingdom.
However, growth expectations for overall GDP results in 2023 have deteriorated, with the group revising its optimistic forecast of a 0.6% GDP expansion to 0.3%.
This concern arises amid fears that the UK could slide into recession during the last quarter of 2023, as evidenced by two or more consecutive quarters of negative economic growth. This comes after a decline in the third quarter and the fragility of economic indicators in the last months of the previous year.
What about family income?
Household income is expected to rise, as consumer price index (CPI) inflation is expected to fall to the Bank of England’s target rate of 2% by May, according to EY.