The economic outlook - RBS

The economic outlook
The economic outlook

Stephen Boyle, Chief Economist, RBS

“Britain grew solidly last year. We created more than 300,000 jobs. Unemployment fell towards five per cent and real wages rose for the first time in seven years. Business profits were as high as at any time since the late 1990s, at least outside the oil industry, and investment grew.

“And all this with no inflation. A combination of falling oil prices and the rise in the value of the pound, which pushed down import costs, meant that inflation has been more or less zero for a year. That is one reason bank rate remained stuck at 0.5 per cent. It will stay there for months yet.

“The momentum of 2015 carries on. Rising employment and wages will support consumer spending. That offers a decent backdrop for many businesses, providing the confidence needed to invest. Inevitably, there are risks. They come mainly from overseas.

“In China, the burden of debt is weighing on growth. In the euro area, the task of making the single currency work will take a decade, if it happens at all. None of that should detract from a solid UK performance in the next few months.”