【英国财政研究所IFS】2025年英国经济展望报告应对终局之战_65页_953kb

UK Economic Outlook: Navigating the Endgame

Core Content

This report by Benjamin Nabarro from Citi provides a comprehensive analysis of the UK's economic outlook, highlighting structural and cyclical challenges, as well as potential opportunities for recovery and growth.

Main Points

1. Economic Performance and Policy Failure

• The UK's economic performance over the past two decades is described as a policy failure.
• Productivity growth has been the weakest since at least 1850, with a decline in high-growth firms from ~6% to ~4%.
• Macroeconomic resilience has suffered due to low growth, low investment, and weak income growth, creating a feedback loop.
• The UK's economic situation is worse than the US or Euro Area, with high debt levels, a structural external financing gap, and elevated rate volatility.

2. Cyclical Outlook

• The UK faces a near-term period of 'sogginess' and a medium-term outlook of optimism.
• Global activity is expected to fall back in the second half of 2024, leading to fading external support for UK growth in 2025.
• Inflation is expected to remain in the 2–3% range in the near term, but will decelerate through 2026 as energy effects fade and slack bears down on prices.
• A modest undershoot in headline CPI is expected through 2026.

3. Structural Challenges and Legacy Risks

• The UK has lagged in productivity growth compared to other advanced economies.
• Productivity growth has been impacted by a decline in total factor productivity (TFP), with the UK's TFP 4.6% lower in 2019 than in 2007.
• The decline in TFP is attributed to reduced investment in intangible and digital assets, exacerbated by financial constraints and a lack of reallocation and competition.
• Institutional and policy barriers, such as tax treatment favoring debt over equity, have hindered investment and innovation.

4. Demand Side and Fiscal Policy

• The demand side of the UK economy is deteriorating, with fiscal support fading and public consumption likely to remain constrained.
• A sharp rise in unemployment is expected, potentially reaching 4.9% in 2025 and 5.3% in 2026.
• The UK's fiscal policy has been procyclical, leading to conflicts with monetary policy, which has been more aggressive in offsetting fiscal support.

5. Monetary Policy and Inflation Aversion

• The Monetary Policy Committee (MPC) remains inflation-averse, but this approach is increasingly inappropriate.
• The MPC is expected to cut rates into accommodative territory by 2025–2026 to address the labor market vulnerabilities and the legacy of procyclical policies.
• The report argues that the MPC is too slow to adjust, which may hinder the recovery.

6. Opportunities and Pathways for Recovery

• The UK has the potential for a supply-side catch-up after recent shocks, with productivity growth expected to improve.
• A more robust cyclical acceleration is anticipated through 2026 and 2027 as supply-side improvements take effect.
• Structural reforms are needed to address long-term growth challenges, including improving investment in intangible and ICT assets, enhancing labor mobility, and upgrading transport and skills infrastructure.

Key Information

• Productivity: UK productivity growth has been the weakest since at least 1850, with TFP declining significantly.
• High-Growth Firms: The share of high-growth firms has dropped from ~6% to ~4%, indicating a slowdown in innovation and business dynamism.
• Labour Market: Excess demand has been eliminated, and the labor market is expected to loosen, leading to higher unemployment.
• Fiscal and Monetary Policy: Procyclical fiscal and monetary policies have created headwinds, and a more coordinated approach is needed.
• Inflation: Inflation is expected to return to target, but a continued focus on inflation risks may lead to undershooting in 2026.
• Growth Gaps: UK GDP is 6.1% below its pre-pandemic trajectory, compared to 4.3% in the Euro Area.
• Policy Recommendations: The report suggests that structural reforms, particularly in investment and labor mobility, are essential for long-term growth and resilience.

Conclusion

The UK's economic outlook is characterized by a mix of near-term challenges and medium-term opportunities. Structural reforms are necessary to address long-term growth issues, while fiscal and monetary policies need to be better coordinated to support recovery. The report emphasizes the importance of strategic investment in intangible and ICT assets, as well as improving labor mobility and transport infrastructure, to enhance productivity and macroeconomic resilience.