Economic Review – September 2024
UK economic growth forecast upgraded
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An updated forecast published last month by the Organisation for Economic Co-operation and Development (OECD) suggests the UK will be the joint-second fastest growing economy among the G7 nations this year.
According to the OECD’s latest projections, the UK economy is set to expand by 1.1% across the whole of 2024, a significant upgrade from the think tank’s previous estimate of 0.4% which was released in May. The new forecast places the UK alongside Canada and France in the G7 rankings, with only the US economy forecast to grow more strongly this year. Gross domestic product (GDP) statistics released last month by the Office for National Statistics (ONS), however, did show that the UK economy unexpectedly failed to grow during July, after also flatlining in June. Despite the lack of growth across both of these months, ONS did note that ‘longer term strength in the services sector’ had resulted in some growth across the economy during the three months to July as a whole.
Data from the latest S&P Global/CIPS UK Purchasing Managers’ Index (PMI) also suggests growth across the UK private sector has softened more recently, with its preliminary headline indicator standing at 52.9 in September, down from August’s figure of 53.8. This does, however, mean that for the eleventh consecutive month, the Index remained above the 50 threshold that denotes expansion in private sector output.
Commenting on the findings, S&P Global Market Intelligence’s Chief Business Economist Chris Williamson acknowledged that the latest data did suggest output growth in both manufacturing and services had moderated last month. He added, “A slight cooling of output growth across manufacturing and services in September should not be seen as too concerning, as the survey data are still consistent with the economy growing at a rate approaching 0.3% in the third quarter.”
