The UK GDP growth forecast has been lowered in 2024 to 0.7% from the previous 1.8%. This was announced by the head of the Ministry of Finance of the United Kingdom, Jeremy Hunt, speaking in the House of Commons with the autumn budget message.
According to Hunt, the Office for Budget Responsibility expects the economy to grow by 0.6% this year and 0.7% next year. After that, growth will be 1.4% in 2025, 1.9% in 2026, 2% in 2027 and 1.7% in 2028. Calculations and forecasts of this non-governmental consulting organization are traditionally used by the Ministry of Finance when preparing the budget.
In March, the Office for Budget Responsibility expected a slight contraction of the UK economy by the end of this year (by 0.2%), but next year it predicted growth of 1.8% and 2.5% in 2025.
Hunt noted that inflation rates in the kingdom are now lower than in almost half of the EU economies. Referring to the forecasts of the Office for Budget Responsibility, he stated that "the overall inflation rate will fall to 2.8% by the end of 2024, and then fall to the target of 2 percent in 2025.
Regarding the public debt, the Finance Minister said that its share in the ratio to GDP will decrease to 92.8% by 2028-2029, and the level of public sector borrowing by the same period will reach 1.1% compared to the current 4.5%. Hunt also said that in April next year, state pensions will increase by 8.5%.
According to the Finance Minister, his autumn statement announces 110 different measures aimed at "ensuring the growth of the British economy" on the eve of parliamentary elections to be held in the kingdom no later than the beginning of 2025. A significant part of the measures involves supporting small businesses, including British hotels, restaurants and pubs, which were promised a freeze on excise taxes on alcohol until August 2024. The Finance Ministry's plan also provides assistance to innovative industries through new tax deductions and simplification of procedures for approving construction projects.
Hunt also announced the "largest-ever" increase in the minimum wage for workers over the age of 23 by 9.8%, to 11.44 pounds ($13) per hour. In addition, the amount of mandatory contributions to the national insurance system, from which various benefits and pension payments are financed, will be reduced. The basic rate of this tax, paid from the first thousand pounds of income that an employee receives per month, will decrease from 12% to 10%.
