UK Economic Outlook (Autumn 2023)
Think tank: National Institute of Economic and Social Research (NIESR)
Author(s): Various authors
November 8, 2023
This report from UK think tank the National Institute of Economic and Social Research calls for renewed public investment.
The latest quarterly forecast from the National Institute of Economic and Social Research calls for renewed public investment, rather than tax-cuts, ahead of the forthcoming Autumn Statement and next year’s General Election.
Flatlining productivity and sluggish economic growth means that we project the real incomes of working families in the bottom half of the income distribution to be about 5 per cent lower in 2023-24 compared with 2019-20, and not returning to pre-pandemic levels until the end of 2026.
We expect the rate of inflation to continue its decline, although it will remain above target until towards the end of 2025, and price levels will remain much inflated. Specifically, we expect the rate of inflation to be around 5 per cent by the end of the year and fall to around 4 per cent by the end of 2024.
We believe that the Monetary Policy Committee (MPC) has done enough and that interest rates have peaked at 5.25 per cent. When it comes down, we expect interest rates to stabilise between 3 and 3.5 per cent.