UK Economic Growth And Inflation Forecast For 2025

According to Odaily, the National Institute of Economic and Social Research (NIESR) in the UK released a relatively optimistic forecast on Wednesday, predicting robust economic growth and a decline in inflation for the country this year. However, the report suggests limited room for further interest rate cuts by the Bank of England. NIESR anticipates that inflation will peak at 3.2% in January, with an average inflation rate of 2.4% for the year, and a decrease to 2% by 2026. This outlook is notably more moderate than the Bank of England's forecast, which expects inflation to rise to 3.7% in the third quarter of this year and not return to the 2% target until the end of 2027. Despite these differences, NIESR indicates that the Bank of England has room for only a 25 basis point rate cut this year, with another reduction expected in 2026, bringing the rate down to 4%.