No recession yet
Commenting on this morning’s UK GDP data Melanie Baker, senior economist at Royal London Asset Management, said:
“The message from the data was not as gloomy as the fall in Q2 and June GDP growth might suggest. Focusing on June, GDP fell by less than expected, there was a loss of two working days compared to normal and reduced test and trace/vaccination activity played a key role too. In other words, it is difficult to view the fall in GDP as a sign of significant underlying deterioration in economic activity. At least not yet.
“I continue to have a recession pencilled into my forecasts, but for the turn of the year rather than sooner. Pay growth is not keeping up with inflation, consumer confidence is very weak, the Bank of England continues to hike rates. Energy prices remain a serious issue for the economy and a very large energy bill increase for households is widely expected in October, though there is still potential for more fiscal help for households too.”
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Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
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