Little economic growth forecast

PREDICTIONS have revealed that economic growth is set to remain “flat” in Hampshire and the Isle of Wight, with a small increase of just 0.1% in 2024.

Hampshire County Council cabinet papers have revealed that despite a “better than expected” economic performance in the first half of 2023, growth for 2024 is not expected to be more than 0.1% and will only be marginally better in 2025 at 1% growth. The report said: “Economic growth in Hampshire over the next three years is projected to be considerably slower than the 2.1% per annum growth rate observed in the pre-pandemic decade”.

An Office for Budget Responsibility (OBR) forecast suggests the UK economy will expand by 0.7% in 2024, considerably slower than the 1.8% forecast in the last spring budget. Economic activity and employment saw a robust increase in June 2023 compared to the previous year, driven by a rise in employee numbers.

Self-employment in Hampshire increased despite the cost-of-living crisis affecting the sector, papers said. There are an estimated 66,000 working-age self-employed people in the county, just under one-in-10 of the workforce and rising to 100,000 for Hampshire and the Isle of Wight.

The OBR expects the UK labour market to continue softening, with employment growth forecasts to stall this year. Under the weight of high interest rates and slower economic growth, unemployment is expected to peak at 4.6% in the second quarter of 2025. This is more optimistic than the Bank of England November forecast, which expected unemployment to reach 5% in 2025.