Economic Analysis of the UK Economy for 2024

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economic growth analysis

UK GDP amounted to $3089.07B for the year ending 2022, down from $3141.51B in 2021. While marginal, the overall trend is bullish, given the lackluster performance of the UK economy for the preceding years. This is particularly notable heading into the pandemic in 2020.

economic analysis of UK in 2024

Official World Bank data indicates that the UK’s GDP accounts for 1.33% of the global GDP. The UK GDP per capita in USD amounts to $47,923.48, with significant contributions from services, public administration, manufacturing, and construction.

In 2023, the UK economy bested expectations. There was widespread consensus that the gross domestic product in the UK would decline by 1%. As all the figures are being tallied, economists forecast growth of 0.5% for the year.

For the third quarter in 2023, business investment increased by 6.3%, while a notable component of GDP – household investment rose by 0.3%. While marginally lower than the pre-pandemic levels, this is a positive turnaround for UK traders and investors.

 

Trading and Investing Data

 One of the most heavily traded currency pairs in the UK and internationally, the cable (GBP/USD) is showing resilience of late. Growing retail traders are registered with an MT4 account at the top-tier trading platforms.

trading-investemnt

Some interesting analysis is presented regarding the performance of the GBP/USD. Experts noticed an uptick over the past three months, reflecting a move from 1.2067 to the current level of 1.26836 midway through January 2024. This bodes well for traders and investors with a bullish perspective on the GBP as it attempts to regain its former glory during the pre-Brexit period years ago.

Traders and investors are skilfully navigating various options like MetaTrader4, with live accounts readily available. Real-time access to pricing, trade executions, tools and resources is provided at the premier brokers.

The shift from traditional brick-and-mortar brokerage firms to online trading platforms continues unabated in 2024, thanks largely to democratized access to regulated brokers. UK traders now display an interest in various financial instruments including Forex, digital currency CFDs, index CFDs, share CFDs, bond CFDs, and commodity CFDs.

These contrarian options allow traders to forecast price movements on the underlying assets without taking ownership. Cyprus Securities and Exchange Commission regulation, negative balance protection, and leveraged trading appear to resonate with UK traders.

Over the years, we have noticed robust growth in the number of unique forex traders in the UK, rising from 78,000 in 2014 to 124,000 in 2016, with dramatic increases since then. Statista figures indicate that the forex market daily turnover in the UK alone amounted to $3.65 trillion in 2019. That figure dipped in 2020 but continues its march upward.

Incidentally, the UK forex market is 250% greater than its closest rival, the US. These trends are set to continue for 2024.

 

Current GDP Expectations

For the current year, upbeat expectations continue. Modest GDP growth is forecast for 2024, around 0.5%. The more robust growth figure of 1% is slated for 2025, all else being equal. Inflationary effects are one of the biggest concerns facing UK consumers, businesses, traders, and investors.

There are several ways to tackle this issue, notably workforce reduction, technological innovation, or price rises. Either way, these increased costs will eat into the personal disposable incomes of consumers. Since businesses prefer to pass on rising costs to consumers, the end result is negative.

In October 2023, the ONS reported an inflationary drop to 4.6%. Consumers could finally enjoy some relief, thanks largely to lower energy prices – OPEC and WTI crude oil prices. Equally important now, the UK is in tandem with other major developed economies vis-a-vis economic performance.

Labor market participation rates are also improving, and unemployment is a smidgen under 4.2%. Increasing real wages is helping to offset the impact of inflationary pressures.

According to the Guardian, UK inflation is dropping but still above the target inflation rate. In January 2023, the inflation headline figure was 10% +, but in November 2023, it dipped to 3.9%. This year’s expectations of declining inflation persist, but it’s not until 2025 that the Bank of England expects government targets to be reached. The BOE is expected to slash interest rates from 5.25% this summer, but it’s contingent upon many elements in the geopolitical arena.