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UK Inflation and GDP Update – January 2024


The Royal Mint
Category: Invest


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It’s been a busy period for United Kingdom economic data, with readings released for economic growth, unemployment and inflation rates.

Perhaps the biggest surprise was the Consumer Prices Index inflation figure of 4% in the 12 months to December 2023, led by higher prices for tobacco and alcohol. Initial forecasts predicted that the latest inflation number would come in at 3.7%, after dropping to 3.9% in November.

The higher reading confounded many commentators who opined that lower average wage growth in the quarter to December should feed into weaker headline inflation. Nevertheless, unemployment rates held steady in the year to November, with a reading of 4.2%, in line with the previous month and the general market consensus.

Last week, monthly gross domestic product (GDP) growth to November also surprised to the upside, showing a 0.3% rise in output. This followed a 0.3% fall in October, trumping market forecasts of a 0.2% rise and marking the strongest GDP growth in five months.[1]

Overall, there remains an ever-present risk to inflation expectations from externalities such as conflicts in the Red Sea and access to the Suez Canal disrupting trade patterns. According to Clarksons, a shipbroker, roughly 24,000 vessels crossed the Suez Canal last year. This amounted to one-tenth of global trade, including 10% of seaborne oil and 8% of liquefied natural gas.[2]

Whilst it is commonly known that oil and petroleum prices feed both directly into the price of our fuel and home energy, they also indirectly cause cost pressures in other energy intensive products that we consume.

Several other geopolitical risks also remain, not least the Ukraine conflict, where oil and agricultural supply disruptions could have the potential to cascade price rises throughout Europe.  

Meanwhile, the political landscape during 2024 is also set to be a turbulent one; there will be a total of 65 elections across the world, giving 40% of the global population a chance to vote. If this feels exceptional, it’s because it is. To put it into perspective, we will have to wait until 2048 for the world to see as many elections in one calendar year as we will see throughout 2024.[3]

In other news, the largest UK banks and lending institutions have continued to lower their mortgage rates in the face of easing inflation. This is perhaps signalling that they believe the worst of inflation is behind us. Ultimately, this sets the scene for the Bank of England to reduce its policy rate this year, with some expecting this to happen as early as May.[4] Could this remove the headwinds holding back the gold price from making a concerted move above £1,600 per troy ounce?[5]



[1] –

[2] – Oil prices steady despite Middle East tensions, but risks are rising | Oil and Gas News | Al Jazeera

[3] – What elections mean for the global economy - Investors' Chronicle (

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The contents of this article are accurate at the time of publishing, are for general information purposes only, and do not constitute investment, legal, tax, or any other advice. Before making any investment or financial decision, you may wish to seek advice from your financial, legal, tax and/or accounting advisers.


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