The UK Economy: Light at the end of the economic tunnel

Wake Smith Solicitors 10 February 2023

Despite the turbulent times that have befallen the UK economy over recent years, experts are reporting a positive outlook. The impacts of coronavirus, Brexit and wider supply disruptions may still be taking their toll but businesses, families and property owners can remain confident.

In this article, we’ll take a look at what experts are saying about the likely trends and how it will impact businesses, families, and property owners.

According to Handelsbanken, a leading international bank, the UK’s near-term outlook remains a little uncertain as we continue to navigate our way through the aftermath of the pandemic and the ongoing consequences of the war in Ukraine. However, there are many positive signs that suggest the worst is behind us and a return to some stability is expected.

James Sproule, Chief Economist at Handelsbanken recently delivered a webinar at which he shared some detailed insights and data about the economy, including some thoughts about ‘what’s next’, including (some very brief headlines):

  • The UK is unlikely to avoid a recession, but the expectation is that this will be a ‘mild recession’.
  • The employment market is broadly good.
  • Inflation has most likely peaked (end of 2022).
  • Falling energy prices will drive inflation lower.
  • Inflation will come down slowly.
  • The bank base rate will increase to 4% possibly 4.5% but then it should stabilise. It’s unlikely to drop this year.
  • We are unlikely to return to the ‘cheap money’ we experienced in the period 2015 – 2020.

The impact of the pandemic on certain sectors:

o Flights at Heathrow – down 14% & passenger numbers down 18% from pre-pandemic levels.

o Hotel bookings in the UK – down 5%.

o Offices/property – no reliable data but indicatively 8% more people work from home on Friday’s.

o Online shopping (amongst other things) has created new behaviours and habits that will be hard to reverse.

o Property – all asset classes are expected to reduce in value.

Overall, the outlook is not gloomy, in fact it’s quite positive. We should all be a little more optimistic, we’ve been through a lot worse.

What Does This Mean for Businesses & Families? 

Businesses have something to be optimistic about: consumer spending increases, new investments in technology and a reduction of overhead costs associated with office space rental should all contribute towards improved bottom lines. Wages are also likely to rise, allowing families the chance to gain financial stability by saving more money for larger purchases such as homes or cars. Furthermore, inflation rates could stabilise and then reduce over time - providing some welcome relief through cheaper prices on everyday goods.

What Does This Mean For Property Owners?

Property owners could experience a welcome period of stability, with the likelihood that consumer spending will return and strengthen demand for housing. 

All in all, while there are still many uncertainties surrounding how exactly the UK economy will look beyond 2023 after a number of uncertain years, it looks like there is light at the end of this long economic tunnel!

Tags

Archive

November 20242October 20246September 20245August 20245July 20243June 20243May 20245April 20242March 20247February 20242January 20248December 20236November 20232October 20233September 20232August 20234July 20232June 20235May 20237March 20234February 20235January 20233December 20225November 20224October 20224September 20223June 20221May 20227April 20223March 20223February 20223January 20224December 20214November 20213October 20214September 20216August 20212July 202111June 20218May 20216April 20212March 20218February 20218January 20219December 20208November 202013October 20208September 20208August 20203July 20208June 202016May 202011April 20206March 202016February 20208January 202011December 20199November 20199October 201911September 20195August 20194July 20196May 20198April 20196March 20193February 20195January 20194December 20186November 20185October 20182September 20185August 20184July 20189June 20184May 201810April 20185March 20184February 20184January 20183December 20175November 20178October 20177September 20179August 20175July 20176June 201710May 20175April 20178March 201711February 20176January 201710December 20169November 20167October 201610September 201610August 20166July 20167June 20163May 20162April 20166March 20162February 20164January 20165December 20153November 20155October 20156September 20156August 20157July 20157June 20157May 20156April 20159March 20156February 201510January 20156December 20145November 20144October 20142September 20143May 20144March 20146February 20144January 20142December 20132November 20133September 20134July 20132June 20132May 20133April 20131March 20133February 20133January 20136December 20121November 20123October 20122August 20122July 20128June 20123April 20123March 20121January 20124December 20112November 20111October 20112September 20113August 20113July 20117June 20119May 20117April 20115March 20119February 20118January 20111December 20101October 20102September 20102August 20103July 20106June 20101May 20102April 20106March 20102February 20103January 20102December 20095November 20092October 20092September 20092August 20091July 20095June 20095May 20093April 20093March 20093February 20091January 20092November 20082October 20082September 20081August 20083July 20081January 20082

Featured Articles

Contact us