2022-03-10-牛津经济研究院-United_Kingdom_The_supply_shock_continues_5页_219kb

UK Economic Briefing Summary (11 March 2022)

Key Points

• The energy price-driven supply shock from Russia's invasion of Ukraine persists, leading to higher inflation and downward revision of economic growth forecasts.
• Inflation is expected to rise above 8% this spring, peaking at over 8% in April, and average 6.5% for 2022.
• GDP growth for 2022 and 2023 is forecasted at 3.7% and 2.1%, respectively, down from 3.8% and 2.9% previously.
• The upcoming Spring Statement may provide household support, but effectiveness is uncertain, with energy bills likely swamping income gains, particularly for low-income groups.
• Short-term data suggests some economic momentum from overcoming Omicron losses in January, but supply constraints and high volatility make the outlook uncertain.
• Monetary policy may tighten if inflation persists, with a potential Bank Rate increase to 0.75% considered.

Main Predictions

• Inflation: CPI forecasted to average 6.5% in 2022 and peak at >8% in April.
• GDP Growth: Annual growth slowing to 3.7% in 2022 and 2.1% in 2023.
• Interest Rates: Possible rise to 0.75% by March meeting to balance inflation risks.

Uncertainty

• Factors include conflict resolution, energy price developments, and data releases on employment and inflation.