At the annual conference, the industry is urged to embrace prudent risk-taking for long-term returns, fostering a technology-driven UK export powerhouse. The shift from safetyism to embracing risk is crucial, as is rethinking the ‘hierarchies of harm’ and focusing on broader societal benefits. The conference emphasizes the need to enhance the industry’s role in society, promote long-term investment benefits, and ensure financial security for all.
New research by Oxford Economics reveals London Gatwick Airport’s significant contribution to the UK economy in 2023, highlighting its role in supporting economic activity and employment. The airport contributed £5.5 billion to the economy, supporting over 76,000 jobs, reaching levels close to pre-pandemic figures. The economic impact was primarily concentrated in the South East region, including West Sussex, East Sussex, Surrey, Kent, Brighton and Hove, and Croydon.
The UK economy has emerged from recession with a 0.6% growth in the first quarter of 2024, its strongest expansion since 2021. This positive news has boosted Prime Minister Rishi Sunak’s prospects ahead of an upcoming election, while the opposition Labour Party remains critical of the government’s economic policies. Despite the growth, the UK recovery from the pandemic remains slow compared to other major economies, and living standards continue to be squeezed.
Britain’s economy grew by the most in nearly three years in the first quarter of 2024, ending the shallow recession it entered in the second half of last year and delivering a boost to Prime Minister Rishi Sunak ahead of an election.
Despite a 28% decline in first quarter profits, Lloyds Bank expressed confidence in the UK economy. CEO Charlie Nunn emphasized the bank’s commitment to supporting customers and executing its strategic goals. Lloyds’ shares have faced challenges in recent years, but the bank remains focused on achieving sustainable returns. The results for this year are expected to align with expectations, with profit margins slightly decreasing. Lloyds has also allocated £450 million to address an investigation by a City watchdog regarding car loans.
The UK private sector witnessed impressive growth in April, fueled by strong performance in the service industry. According to the closely watched S&P Global/CIPS flash UK purchasing managers’ index (PMI), activity expanded at the fastest pace in almost a year. The PMI reading of 54 in April signals a continuation of the UK economy’s recovery from recession in late 2023. Despite a decline in manufacturing, robust growth in services, driven by increased business and consumer spending, propelled overall business expansion.
After previously mirroring the U.S. Federal Reserve’s rate hike cycle, the Bank of England has signaled a shift towards a more dovish stance, citing divergent inflation outlooks between the UK and the US. Investors now anticipate two rate cuts in the UK this year, with the first expected in August. This change in market expectations underscores the Bank’s assessment that the UK’s inflation outlook is ‘rather different’ from the US, with disinflationary pressures expected to intensify in the coming months. The Bank’s dovish communication, including a potential downgrade of the forward guidance on keeping rates restrictive for an ‘extended period,’ could further support the case for an imminent policy easing. This divergence from the Fed’s expected rate cuts in September marks a departure from the recent pattern of synchronized rate hikes and highlights the Bank’s independence in policy-making.
The UK’s private sector experienced its fastest growth in almost a year during April, thanks primarily to a robust performance in the service industry. According to experts, this positive economic data suggests that the UK economy is continuing to recover from the recession toward the end of 2023. In April, the closely monitored S&P Global/CIPS flash UK purchasing managers’ index (PMI) reported a reading of 54, up from 52.8 in March. Since May of last year, these preliminary data-based flash figures have been the highest recorded. Any score below 50 indicates contraction, while any score above it indicates growth. Chris Williamson, chief business economist at S&P Global Market Intelligence, commented, ‘Early PMI survey data for April show that the UK economy’s recovery from recession last year has continued to gain momentum.’ ‘While the improving economic recovery picture is welcome news, the upward pressure on inflation will add to concerns that a sustainable path to below-target inflation has not yet been achieved.’ The overall business growth reached its highest level in nearly a year, driven by the service sector’s improved growth, which offset a new decline in manufacturing. This indicates that GDP (gross domestic product) is increasing at a quarterly rate of 0.4% following a 0.3% increase in the first quarter. The survey found that service sector businesses reported a surge in growth over the month, hitting their highest level in 11 months. Companies highlighted increased business and consumer spending, supported by a broader economic recovery.
UK government borrowing exceeded predictions for the previous fiscal year, reaching £120.7 billion due to rising wages and benefit payments. Despite being £7.6 billion lower than the previous year, borrowing was £6.6 billion higher than projected by the Office for Budget Responsibility. The overall government debt now stands at 98.3% of GDP, a level not seen since the early 1960s.
