Michael Simmons

In more bad news for Rachel Reeves as the Chancellor prepares for next week's Spring Statement, the OECD has downgraded Britain’s growth prospects. The organisation forecast the UK’s economy to grow 1.4 per cent this year and then just 1.2 per cent next year – compared with the 1.7 per cent and 1. 3 per cent that they’d previously estimated. In fairness, the whole world is seeing slower growth, according to the OECD’s estimates. America’s growth forecasts were also downgraded to 2.2 per cent this year, followed by 1.6 per cent in 2026 compared with the 2.4 per cent and 3.1 per cent that had originally been forecast.

Markets are not enjoying Donald Trump’s tariffs. Some 125 days have passed since his second election victory and the S&P 500 is on a clear downward trajectory thanks to Trump’s tariff policies and other poor US economic data. After the same number of days following Biden’s election, the S&P was up 13 per cent; for Obama’s second term it was up nine per cent; and at the same point in Trump’s first presidency it was up 11 per cent. For Trump 2.0 it’s down 3 per cent from election day. Trump has summoned Wall Street bosses to the White House in an attempt to calm nerves, but while US equities struggle, some clear winners are emerging as investors shift their money elsewhere. So, who stands to gain?

Donald Trump has refused to rule out an American recession. He ‘hates to predict things like this’, he said yesterday. When asked if a downturn was coming this year, the President responded that a ‘period of transition’ was on the cards. On Thursday last week the Atlanta Fed’s GDP ‘nowcast’ model was forecasting that America’s economy would shrink by 2.4 per cent in the first quarter of this year – a slight improvement on the 2.8 per cent contraction it had predicted three days earlier. If this reading for the first three months of 2025 proves to be true, and things don’t pick up shortly, could the USA be heading for recession?

The number of young people not doing anything with their lives has hit its highest level in 11 years. Figures released this morning by the Office for National Statistics (ONS) on 16- to 24-year-olds not in education, employment or training – so-called NEETs – show that the number has reached just under one million in the last three months of 2024. Standing at 987,000, the number of NEETs is up by 110,000 since the end of 2023 – equivalent to a town the size of Oldham. The new data means that nearly one in seven Britons aged 16 to 24 are not in education, employment or training. The figures are worse for young men than for women (14.4 per cent vs 12.3 per cent); however, ONS statisticians said the increase in the last 12 months came from men and women equally.

Average gas and electricity bills will rise by £111 a year in April after the regulator Ofgem announced an increase to the energy price cap. The 6.4 per cent hike means the average dual-fuel household bill will hit £1,849 annually. The rise is more than anticipated, with analysts at Cornwall Insight predicting that bills would rise by just 5 per cent in April. Ofgem blamed inflation and ‘rising global wholesale prices’ for the bigger-than-expected increase. As a result, the cap will be £159 (nearly 10 per cent) higher than for the April to June period last year. The rise in energy prices is why the Bank of England recently forecast inflation to return to nearly 4 per cent this summer. As Kate Andrews reported last week, inflation in January rose to 3 per cent, up from 2.

Britain’s workers have experienced strong pay increases for the third month in a row. Figures on the jobs market, just released by the Office for National Statistics (ONS), reveal that pay rose 6 per cent in the final three months of 2024 – the fastest pace of pay growth in over a year. Strip out inflation, and the average worker saw a 2.5 per cent pay increase – the highest real terms pay rise for three years. While more money in pockets is obviously good news for the workforce, these figures will be ringing alarm bells at the Bank of England. The Bank’s interest rate setters see pay increases as an important indicator for inflation and give the jobs market figures great weight when deciding whether to pause rate cuts.