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Executive Summary
Publication year - 1994
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/j.1468-0319.1994.tb00346.x
Subject(s) - economics , inflation (cosmology) , unemployment , interest rate , falling (accident) , unemployment rate , macroeconomics , medicine , physics , environmental health , theoretical physics
Our assessment of the outlook for the UK economy over the next two years has not changed dramatically from February's forecast. Growth now appears to be stronger prior to the tax increases coming into force than we then anticipated. We have therefore revised upwards our forecast for GDP growth for this year to 3% and made a small upwards revision ‐ to 2.3% ‐ for 1995. Inflation is still forecast to remain historically low, with the annual increase in the RPI excluding mortgage interest keeping within the 4% target ceiling. However, underlying inflation is stuck in the 3‐3.5% range for most of the forecast period and a rise in interest rates over the course of next year will be required to contain inflation. After peaking at 7.5% in early 1996, we then expect interest rates to fall back. Unemployment should continue to decline this year, though not at the rate seen over the last year, levelling off at around 2.5 million in 1995 and then falling again in late 1996 and 1997.