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Britain’s economy is expected to grow faster than previously predicted this year and next, the country’s Chancellor of the Exchequer, Rachel Reeves, announced on Wednesday (October 30) while delivering the Keir Starmer government’s first budget.
The nation’s gross domestic product (GDP) is projected to increase by 1.1 per cent in 2024 and by 2 per cent in 2025. These figures exceed the estimates provided in March by the country’s fiscal watchdog Office for Budget Responsibility, according to AFP.
Following the release of the Budget, the OBR, releasing the “Economic and fiscal outlook – October 2024” said that the economy is expected to grow by just over 1 per cent in 2025. It will rise to 2 per cent in 2025, before falling to around 1.5 per cent, slightly below its estimated potential growth rate of 1.75 per cent, over the remainder of the forecast.
The OBR said that the “Budget policies temporarily boost output in the near term, but leave GDP largely unchanged in five years.”
The independent body further noted that “Budget policies push up CPI [consumer price index] inflation by around half a percentage point at their peak, meaning it is projected to rise to 2.6 per cent in 2025, and then gradually fall back to target.”
With inputs from agencies
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