UK Economic Overview

The UK economy portrayed a pessimistic outlook over the final months of 2024 as several green shoots of recovery seen earlier in the year began to stall. This trend was led by weakening GDP growth over Q3 and inflation increasing for the first period since 2022 in October.

At a time when many businesses are looking to 2025 as a year of recovery, the economic outlook at the beginning of the year remains pessimistic, with consumer sentiment declining sharply in January and UK industrial output showing deteriorating trends, with manufacturing slowing and production output continuing to fall year-on-year. Increases in National Minimum Wage and National Insurance have increased the focus on labour costs and compounded the cautious outlook as was reflected by increases in the unemployment rate and continued reductions in job vacancies.