UK economic growth to rebound in late 2024, leading forecaster says

EY Item Club report hands PM new year boost with prediction that inflation drop will allow interest rates to fall to 4% by year end

The UK economy will benefit from falling inflation and lower interest rates in the second half of the year, boosting growth and allowing the government to offer pre-election giveaways, according to a study by a leading forecaster.

Handing Rishi Sunak a new year boost, the advisory business EY Item Club, which is sponsored by the accountancy firm EY, said its winter forecast showed that a long period of economic stagnation “should begin to fade this year as falling inflation, potential interest rate cuts and tax reductions create momentum for growth in 2024 and 2025”.