EY ITEM Club Spring Forecast

The UK economy continues to display a lack of momentum and shows little sign of breaking the pattern of stunted growth seen in the second half of 2017. In this report EY reveals its forecast for the months ahead.

Key points include:

• UK GDP is expected to grow by 1.6 per cent in 2018, a downgrade from 1.7 per cent in the EY Winter Forecast.

• The severe weather seen at the end of February and the first half of March appears to have weighed down significantly on economic activity at the beginning of the year.

• Consumers can expect to see a ‘double positive’ for real income growth, with inflation set to fall and stronger pay growth anticipated.

• The EY ITEM Club forecasts real household income growth to hit 1.2 per cent in 2018 and 1.4 per cent in 2019, a substantial improvement on 2017’s 0.2 per cent rise.