UK's Economy Propped Up by Stronger Global Growth - NIESR
|A Bloomberg report quotes the National Institute of Economic and Social Research (NIESR) as saying that a better-than-expected global expansion and the resulting boost to trade helped push growth last year to 1.8 percent from the 1.2 percent it would have been without such an uplift.
Key points
- Stronger world picture is the primary reason behind the NIESR's decision to upgrade 2018 UK GDP forecast to 1.9 percent from 1.7 percent.
- Should (Brexit) talks fail, and the UK defaults to World Trade Organization trading terms, growth is likely to fall sharply, or even contract, and ultimately lead to a long-term loss in GDP of close to 6 percent relative to its baseline forecast.
- Expects inflation to slow from its peak at the end of last year, and reach the Bank of England’s 2 percent target by the end of 2019.
- Sees BOE raising rates twice this year, says the first 25 basis point hike will likely happen in May.
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