From recession to rate cuts: 2025 economic predictions

I usually feel queasy when writing predictions for the year ahead.

- JAMES MOORE

After all, the internet is forever and if you get it wrong there's always someone to post a link on social media in a year's time with the aggressive, but unoriginal, line: "This you?"

But if economic forecasters, with their supercomputers, spreadsheets and master degrees from fancy institutions, can end up looking daft, how bad could it really get for me?

So let’s dive in at the (very) deep end with my predictions for UK plc in 2025.

1. Recession

I expect the Office for National Statistics will this year confirm that Britain has experienced a recession. That means two consecutive three-month quarters of negative economic growth; 2024 Q3 (July- September) is already sitting at a big fat zero – so one more downward revision to that figure and we’re halfway there. With no one expecting much from 2024 Q4 (OctoberDecember) – the Bank of England has another zero pencilled in – we might already be there.

A poor start to 2025 – and the forward-looking data I’ve seen doesn’t look great – gives another chance for this prediction to prove correct. The latest survey from the British Chambers of Commerce shows its members’ confidence has dropped to the lowest level since the first (and last) Budget of Liz Truss. Consumer confidence is mired in negative territory.