Economy expected to grow by 0.9% in 2024 in major boost to Rishi Sunak’s Government ahead of general election later this year
- EY says it now expects output to rise by 0.9%, in a boost to the government
The economy will pick up this year in a major boost for Rishi Sunak ahead of the general election, a report suggests.
The EY Item Club said it now expects output to rise by 0.9 per cent in 2024, having previously pencilled in growth of 0.7 per cent.
It also upgraded its forecasts for 2025 from 1.7 per cent to 1.8 per cent as a faster than expected fall in inflation and cuts to interest rates and taxes boost the economy.
The findings will be welcomed by Downing Street as the Prime Minister seeks to overturn Labour‘s significant poll lead.
Chancellor Jeremy Hunt last week strongly hinted personal taxes could be cut in the Budget in March. And Mr Sunak said there was ‘more to come’ following this month’s reduction in national insurance contributions.
Official figures showed inflation at 4 per cent in December – down from a 40-year high of 11.1 per cent in October 2022.
The report predicts it will return to the 2 per cent target in May, paving the way for interest rate cuts – currently at 5.25 per cent, a 15-year high.
Hywel Ball, chairman of EY UK, said: ‘Falling inflation and declining interest rates, coupled with the potential for additional tax cuts in the Chancellor’s Spring Budget, suggest the UK is at a turning point in 2024 and about to enter a more positive phase of growth.’
