HomeContributorsFundamental AnalysisResearch UK - Economic Recovery is Set to Continue

Research UK – Economic Recovery is Set to Continue

Jul 30 21, 14:21 GMT

Key takeaways

The UK economy was one of the hardest hit by the pandemic but we think the economic outlook looks bright. The relationship between new cases and hospitalisations have weakened significantly and the economy is fully re-opened. Consumer and business confidence are high.
We expect GDP growth of 7.5% this year and 6.4% next year.
We expect the unemployment rate will be back below 4% by the end of 2022.
We expect CPI inflation to move higher, peaking in early 2022 and then ease to around 2% in H2 22.
Brexit uncertainties have declined but remain high. EU-UK trade has recovered somewhat but not fully since the implementation of the new free trade agreement in January. Brexit has moved to the background as a market theme but risks remain due to discussions over the implementation of the Northern Ireland Protocol.
Bank of England is moving gradually in a more hawkish direction. We expect the Bank of England will end QE this year (perhaps even prematurely) but not hike until H2 22.

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Danske Bank http://www.danskebank.com/danskeresearch

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