Interest rate rises to hit growth next year, EY Item Club forecasts

Rising interest rates have prompted a leading forecaster to more than halve its expectations for economic growth next year.

The latest projections from the EY Item Club predict that annual growth will amount to only 0.8 per cent in 2024, less than half the 1.9 per cent forecast it made earlier in the year.

Prospects for growth have become gloomier as a result of stubbornly high inflation that has forced the Bank of England to redouble its monetary tightening efforts. Projected growth for 2025 has been cut, too, from 2.3 per cent to 1.7 per cent. The Bank said in May that growth would hit 0.25 per cent this year and 0.75 per cent next year, which would put the economy back to its pre-pandemic

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