It’s all but certain that the UK’s exit from recession will be confirmed at the end of this week. Preliminary Q1 data, released on Friday, is expected to how slow and steady growth in the first three months of the year.
It is also very likely that inflation will return to the government target of 2 per cent this month, due to Ofgem’s changes to the energy price cap last month and higher energy costs falling out of the data. The return to target may not last – which is one of the reasons hopes for a spring rate cut have been dashed. But all this will help cushion what is expected to be another decision by the Bank of England to hold rates at 5.25 per cent on Thursday. Threadneedle Street may be erring on the hawkish side, but a rate cut is still expected – possibly this summer.
Neither the Conservative party nor the Labour party is disputing this narrative – though they have come to radically different political conclusions.
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