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2025-12-12 20:14:32
[The Severity of the UK Economic Slowdown Has Exceeded Previous Expectations] According to Berenberg economist Andrew Wishart, the severity of the UK economic slowdown has exceeded previous expectations. Latest data shows that in the three months to October this year, UK GDP fell by 0.1% month-on-month, widening the cumulative output contraction since June to 0.4%. Persistently weak survey data suggests that the current economic woes stem primarily from deteriorating fundamentals, rather than confidence fluctuations triggered by short-term budgets. Based on this, Berenberg has adjusted its forecast for the Bank of England's monetary policy. The institution now expects the Bank of England to implement four 25-basis-point rate cuts by July 2026, bringing the benchmark interest rate down to 3.0% from its current level, a further reduction from its previous forecast of 3.5%. Wishart stated that the economic downturn is a necessary price to pay in achieving a sustainable return of inflation to the target level, but it now appears that this "pain" may be more severe than anticipated.
