UK economic forecast’s 2024 impact on marketing


1. The International Monetary Fund (IMF) predicts that the UK will face a challenging economic outlook, despite avoiding a recession in 2023. Staff forecasts growth to slow to 0.4 per cent in 2023, held back by tighter monetary and fiscal policies needed to curb inflation and lingering impacts of the terms-of-trade shock. Growth is projected to rise gradually to 1 per cent in 2024, as disinflation softens the hit to real incomes, and to average around 2 per cent in 2025[1].

2. The Guardian reports that the UK economy is expected to shrink by 0.5% in 2023, before rebounding to 1% growth in 2024. However, business leaders have expressed concern over declining economic indicators, and analysts at Deutsche Bank predict that the UK’s GDP will not return to pre-pandemic levels until 2024[2].

3. KPMG’s Global Economic Outlook predicts that the UK’s growth will be negative in 2023 at -0.3%, and only 0.6% in 2024. The report cites the squeeze on household incomes and the impact of past interest rate increases as factors that will likely derail short-term momentum[3].

4. EY’s ITEM Club downgraded its growth forecast for the UK in 2024 due to rising interest rates. The report indicates that every 25-basis point increase in Bank Rate reduces GDP growth by 0.1% to 0.2% after around 18 months. The UK economy is expected to grow 0.4% in 2023, up from the 0.2% growth projected in the spring, but the forecast for 2024 has been downgraded to 1.8% from 2.1%[5].

5. The Conference Board expects further slowing of economic growth to 2.4% in 2024 due to high inflation and monetary policy[6].

6. The CBI Economic Forecast predicts 0.4% growth in GDP over 2023, picking up to 1.8% in 2024, upgraded from -0.4% and 1.6% respectively. The report also predicts that business investment will rise, reaching pre-crisis levels by the end of 2024.

Overall, the predictions for the UK economy in 2024 are mixed. While some reports predict growth, others suggest that the UK will continue to face economic challenges. The impact of Brexit and the COVID-19 pandemic, as well as rising interest rates and inflation, are likely to contribute to the uncertainty surrounding the UK’s economic outlook.

Impact on the Marketing Industry:

The predictions for the UK economy in 2024 suggest that the country will continue to face economic challenges. This will inevitably impact the marketing industry in several ways, including:

1. Reduced consumer spending:
If the UK economy continues to struggle, consumers may have less disposable income to spend on non-essential items. This could lead to reduced demand for products and services, which would impact the marketing industry.

2. Increased competition:
As businesses struggle to maintain their market share, they may become more aggressive in their marketing efforts. This could lead to increased competition and a more crowded marketplace.

3. Shifting consumer behaviour:
Economic uncertainty can lead to changes in consumer behaviour. For example, consumers may become more price-sensitive and look for cheaper alternatives. This could impact the marketing strategies of businesses, who may need to adjust their messaging and pricing to appeal to these consumers.

4. Greater emphasis on ROI:
With budgets likely to be tighter, businesses will need to ensure that their marketing efforts are delivering a strong return on investment (ROI). This could lead to a greater emphasis on data-driven marketing and a focus on measurable results.

5. Increased focus on digital marketing:
With more consumers shopping online, businesses may need to shift their marketing efforts to digital channels. This could include investing in social media advertising, email marketing, and search engine optimization (SEO).

6. Greater emphasis on sustainability:
As consumers become more environmentally conscious, businesses may need to focus on sustainability in their marketing efforts. This could include promoting eco-friendly products and services, as well as highlighting the company’s commitment to sustainability.

7. Increased use of automation:
With budgets likely to be tighter, businesses may need to find ways to streamline their marketing efforts. This could lead to an increased use of automation, such as chatbots and email marketing automation, to reduce costs and improve efficiency.

Overall, the marketing industry is likely to face significant challenges in the coming years as the UK economy continues to struggle. However, businesses that can adapt to these challenges and focus on delivering value to consumers are likely to be the most successful.

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