UK economic forecasts for 2010


Below we've put our forecasts for the UK economy for 2010 and some of our reasons for them. If you want to comment on what we've come up with please contribute to the debate section.
% changes year on year unless otherwise stated  

2010 forecast


We predict reasonably low GDP growth and a small increase in house prices without this being reflected by a big increase in inflation. Interest rates may well remain at 0.5% throughout the year but this depends on the result of the general election (the closer the result, the less the public spending cuts and the higher, but later, the interest rate increases). We expect volatility to increase in the second half of the year across a number of indicators, with the eventual direction of the economy emerging in early 2011. We think it is finely balanced between a long slump and a return to long term growth. This depends on the delicate balance of when public sector spending is cut. Too soon and too heavty or left too long and not enough will result in the slump.


Average house prices  




Manufacturing Output






FTSE 100


Current Account Trade deficit


Average Earnings


Inflation (CPI)


Base Rate year end


Oil price