The British Chambers of Commerce (BCC) Quarterly Economic Forecast (QEF) has revised down growth expectations for 2024, but marginally improved GDP expectations for 2025 and 2026.
Increased government spending is likely to boost GDP, however business investment and trade are likely to suffer in 2025 – through the impact of the national insurance rise and major global uncertainties.
The rise in employer national insurance contributions, announced at the Budget, has had a small impact on the forecast – including average earnings and unemployment.
Inflation is now expected to remain above the Bank of England’s target until the end of 2026, due to increased business costs and global trade uncertainties. CPI is forecast to be 2.2% in Q4 2025, unchanged from the previous forecast, and 2% in Q4 2026, slightly higher than the last forecast.
As businesses face tough decisions on costs, unemployment has been revised upwards to be 4.5% by the end of 2025 before falling to 4.2% in 2026 (previously 4.4% in 2025 and 4.1% in 2026).
