Fact Service (April 2016)

Issue 17

Inflation and earnings forecasts for 2016


Inflation and average earnings growth are now expected to be lower than previously thought at the start of the year, according to the latest forecasts for the UK economy collated by the Treasury from around 40 City and academic forecasting institutions.


As of April, the midpoint (median) forecast for inflation rate, as measured by the Retail Pries Index, is expected to 2.0% in the final quarter of the year, compared with the 2.4% forecast at the start of the year. 


The range of forecasts has also moved downwards. The latest range is from a 2.8% rise down to a 1.5% rise. At the start of the year the range was 3.9% down to 1.8%.


The average earnings forecasts cover the calendar year 2016. The latest midpoint forecast is for a 2.6% rise, down from the 3.2% midpoint rise forecast in January. 


The range of forecasts has moved downwards too. The latest expectation is for rises of 3.3% down to 2.0%; the range produced in January was for 4.1% growth down to 2.0% growth.


www.gov.uk/government/collections/data-forecasts#2016


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