The UK economy is expected to slow down in the coming months following a “Goldilocks” start to the year, with the economy enjoying significant growth during the first six months of the year.
Ellie Henderson, UK economist at Investec, claimed that “The economic data released this week portrayed a somewhat Goldilocks scenario for the UK.” This past week, data showed that GDP rose by 0.6% in the second quarter and 0.7% in the first, thereby doing a significant turnaround from the recession that hit the nation last year.
UK inflation also cooled more than expected, edging up to 2.2%, while inflation in the services sector slumped to 5.2%; its lowest level over the past two years. The labor market also appears to be steadying, with jobs data showing a hiring spurt despite regular wage growth heading toward a two-year low of 5.4%.
According to forecasts compiled by Bloomberg, economists are expecting the UK economy to expand by 0.3% in each quarter until the end of 2025. 1% growth is expected next year before rising to 1.3% in 2025 and 1.5% in 2026.