Posts Tagged ‘UK Economy’


National Institute of Economic and Social Research (NIESR) launched its latest economic review at the organization’s quarterly press conference yesterday in Westminster, London.

According to NIESR’s review of UK economy, GDP is to grow by 1.7 per cent in 2016 and drop to 1 per cent in 2017 and will continue to deteriorate in the third and fourth quarter. Inflation  is to increase and peak at 3 percent at the end of 2017.

UK will barrow additional £47 billion within the next five years, the forecast predicted.

Simon Kirby, Head of Macroeconomic Modelling and Forecasting at NIESR, who presented UK economy at the conference explained that :“We expect the UK to experience a marked economic slowdown in the second half of this year and throughout 2017. There is an evens chance of a ‘technical’ recession in the next 18 months, while there is an elevated risk of further deterioration in the near term. In light of the downturn underway and the downside risks to the outlook, a decision by the MPC to provide monetary stimulus would be welcome and we look forward to assessing the new Chancellor’s plans at the Autumn Statement.”

recession after brexit

NISER expects the unemployment rate to rise  from 4.8 per cent in the second quarter of  2016  to a peak of around 5,75 per cent in the middle of 2017.The organization estimates that the economy will shrink in 2016Q3 and lead to a recession at some point during the period 2016Q3 to 2017Q4, inclusive.

Dr Angus Armstrong, Director of Macroeconomics at NIESR, presented the organization’s  forecast of the world economy following Simon Kirby. According to the forecast the world economy is expected to grow by 3.0 per cent in 2016 and peak at 3.5 percent in 2017.  Inflation is likely to be below target in the OECD economies in 2017. The European Central Bank (ECB) stands ready to ease monetary conditions while the Federal Reserve is likely to raise interest rates gradually.

“Re-joining EFTA (European Free Trade Association) is consistent with the notion of ‘taking back control’. This will result in less economic integration with the EU and so lower productivity and output over the medium term. The critical issue is whether the UK can strike deep trade deals with our trading partners elsewhere.  This could be  joining the Trans Pacific Partnership or the Transatlantic Trade and Investment Partnership. At this stage both face significant challenges due to lack of popular support,” said Dr Armstrong at the press conference.

Forecast shows that Brazil, Japan and Russia economies are to grow . India is likely to remain the fastest growing major economy. The US is expected to grow by 2.3 per cent in 2017, with the Fed likely to raise interest rates only very gradually. Inflation is expected to be slightly lower .OECD average inflation will remain well below central banks’ targets through to 2018. The exception is the UK where a short-term rise reflecting the depreciation of sterling is expected, NIESR’s forecast indicated.


National Institute of Economic and Social Research announced its World and UK Economy third quarter forecast at its regular press conference in Westminster yesterday, on 19 October 2010.

Senior Research Fellow Dawn Holland presented the recent figures of the world economy at the conference. According to the research that was done by Holland ,Ray Barrell and six other research fellows of the organisation :

Research Fellows; Simon Kirby(from left to right),Dawn Holland and Ray Barrell present prospects for the world and the UK economy at NIESR's third quarter press conference in Westminster.

World GDP growth will be 4.9% in 2010 and to decrease to 4.5% in 2011.

China is to grow by 10.7% by the end of 2010 and will become the largest economy in the world in 2019 while Japan growth reaches 3.2 %  in 2010.

Despite  fears of double-dip recession in the country, US will grow by 2.8% both in 2010-2011. Euro Area ‘s growth will be only 1.8% in 2010 and 2.1% in 2011.

Canada is to be the first G7 country to regain pre-crisis level of output by the end of this year while OECD  output will be reaching  pre-crisis level in the first quarter of 2011.

World trade will grow by 13.5 per cent this year and 10.3 per cent in 2011.

German output will increase by 3.4 per cent this year and 2.8 per cent in 2011.However, Greek GDP will shrink by 3.1 per cent in 2010 and 1 per cent next year. Output in Spain and Ireland will fall this year, by 0.1 and 0.4 per cent respectively.

Prospects for the UK economy was presented by NIESR’s research fellow Simon Kirby at the conference. Kirby’s research showed that:

GDP growth in the UK  expected to be 1.6% this year and in 2011 and will rise to 2% in 2012.

Consumer spending to rise by 0.8% this year and will stagnate in 2011.Real incomes expected to drop by 0.8% in 2010 and 0.6% in 2011.

30 months after the recession the UK economy remains  4% below pre-recession peak.

Unemployment in the UK has stabilised but it will rise to 8.5% in 2011.

Dr Ray Barrell explained the fiscal policy at the end of the press conference.