BoE forecasts UK GDP will continue to grow despite elevated interest rates

GDP growth to reach 1.6% in 2027

The Bank of England has forecasted that UK GDP will rise by 0.2% in the second quarter of 2024, following 0.4% growth recorded in the first three month of this year.

News about growth comes despite elevated borrowing costs. According to a monetary policy report published on Thursday (9 May), the BoE is set to slowly cut rates from 5.25% to 3.75% by the end of Q2 2027.  The latest BoE projections expect GDP to expand by 0.9% in Q2 2025, 1.2% in Q2 2026, and 1.6% in 2027.  Last Wednesday (8 May), the Monetary Policy Committee voted by a majority of 7-2 to keep interest rates unchanged at 5.25%. UK growth 'outpaces' US and eurozone for first time in three years as economy grows 0.6% in Q1 However, interest rate forecasts continue to remain elev...