UK: Negative real wage growth has slowed GDP growth – Danske Bank

In view of Senior Analyst, Mikael Olai Milhøj at Danske Bank, while the UK was remarkably resilient to Brexit uncertainties in H2 16, the economy has begun to slow, as negative real wage growth has hit consumption.

Key Quotes

“We expect GDP to grow around 0.3% q/q per quarter throughout the forecast horizon. As growth is below trend, we still think it is likely that the unemployment rate will increase slightly.”

“Inflation has risen significantly due to the weaker GBP and is expected to remain high in the years to come.”

“We expect the Bank of England to remain on hold despite higher inflation due to growth concerns and high political uncertainty.”