An overview of the UK economy: March 2015
Our analysts at Trade Finance Global look at recent economic trends and what’s going on in the economy.
- Due to oil price reductions amongst other factors, inflation this year is set to fall to 0.2%. This is a reduction of 1% from that predicted in December.
- The UK growth rate has increased from the 2.4% predicted in December and is now set at 2.5% in 2015. This is according to the Office for Budget Responsibility.
- It is predicted that the economy will grow at 2.3% every year for the next three years and after that, 2.4% in 2019.
Borrowing and spending
- Long-term gilts sales will increase by the government, to keep low borrowing rates and pay down old debts.
- Debt as a percentage of GDP will be reduced in 2015-16. It is important to note that this is the first time this will happen since 2001.
- Debt as a percentage of GDP will be 80.4% in 2014-15 and 80.2% in 2015-16.
- We are not holding our breath, but it is estimated that the figures for public borrowing has a downwards revision from £91.3bn to £90.2bn in the current fiscal year since December 2014.
- It is estimated that public borrowing in 2015-16 will reduce from £75.9bn to £73.5bn and in 2017-18 it will be at £12.8bn.
- The deficit will be 5% this fiscal year as a percentage of GDP.
- The deficit as a percentage of GDP is a 0.2% surplus in 2018-19, then 0.3% the year after.
- The government has committed that their departments will cut £30bn of spending by 2017-18, welfare savings will be £12bn stricter rules on tax evasion and avoidance is set to save £5bn.
Read our summary of the 2015 budget here.
- There has been a prediction in this year’s budget that minimum wages will rise to £8 by 2020.
- Unemployment is currently at 5.7% and by the end of 2014 is set to fall to 5.3%.
- Osborne claimed in his budget that 1,000 jobs are being created daily.
Find out the latest on the Euro/Pound rates here.