UK GDP Growth is Expected to Slow

Key points

• GDP growth is expected to slow from 2 per cent in 2016 to 1.7 per cent in 2017 and 1.9 per cent in 2018.
• We forecast consumer price inflation to average 3.3 per cent in 2017 and 2.9 per cent in 2018.
• We expect the MPC to ‘look through’ this temporary period of above target inflation.
• The new fiscal mandate is for the government to reduce cyclically adjusted public sector net borrowing to below 2 per cent of GDP by 2020–21. We expect the government to meet this target with relative ease.