Economy to enjoy 'Indian summer' - report

clock

Latest forecasts suggest the economy will return to growth over the next six months, boosted by falling inflation and a pick-up in consumer spending.

Analysis from Ernst & Young (E&Y) predicts falling inflation will mean consumers will have extra cash to spend on the high street.

However, the report said the UK will only achieve zero growth in 2012 as a whole. It said longer term, sustainable growth remained dependent on an improvement in the UK's export performance and business investment.

E&Y forecasted 1.6% GDP in 2013 and 2.6% in 2014.

Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club said: “Spiralling inflation has cut real wages by 7.5% over the last four years, but the squeeze is almost over.

"Inflation is now coming back to heel, helped by the Chancellor’s decision to postpone the increase in fuel duty, falling energy and commodity prices, plus tax changes dropping out of the calculation.

“The boost to household finances and the subsequent pick up in spending should be enough to push the UK back into positive territory this year, but don’t expect a consumer led recovery further out. Longer term, consumers are going to be more focussed on reducing their debt burden rather than splashing the cash.”

More on Adviser / Broking

New Leaf Distribution appoints head of protection

New Leaf Distribution appoints head of protection

Jo Pawson takes the role

Jaskeet Briah
clock 19 September 2025 • 1 min read
FCA Market Study: The problem of loaded premiums

FCA Market Study: The problem of loaded premiums

Firms should “prioritise simplicity and transparency”

Tony Müdd
clock 17 September 2025 • 3 min read
Tavistock acquires Lifetime Financial Management Intermediaries

Tavistock acquires Lifetime Financial Management Intermediaries

Refocusing the company's strategy

Isabel Baxter
clock 12 September 2025 • 3 min read

Highlights

COVER Survey: Advisers damning of protection insurer service levels

COVER Survey: Advisers damning of protection insurer service levels

"It takes longer than ever to get underwriting terms"

John Brazier
clock 12 October 2023 • 5 min read
Online reviews trump price for young people selecting life and health cover

Online reviews trump price for young people selecting life and health cover

According to latest ReMark report

John Brazier
clock 11 October 2023 • 2 min read
ABI members with staff neurodiversity policy nearly doubles

ABI members with staff neurodiversity policy nearly doubles

Women within executive teams have grown to 32%

Jaskeet Briah
clock 10 October 2023 • 3 min read