Will the UK see deflation?

Deflation looms in the UK, and its potential impact on the economy is becoming a growing concern. Recent data shows that in December 2025, UK shop prices saw their sharpest decline in over 3 years, with annual shop price deflation reaching 1%, up from 0.6% in November.

Is the UK economy in trouble in 2025?

Although the economy grew more than expected in the first quarter of 2025, analysts had warned that the disruption and uncertainty caused by the US trade tariffs, which began in April, could limit growth in the later part of the year.

Is deflation coming?

And deflation is exactly what may be in store for the US, according to one top economist. David Rosenberg, the president of Rosenberg Research, thinks that America could be headed toward a "deflationary shock," a situation where prices decline rather than merely increase at a slower pace.

Is there any hope for the UK economy?

This more optimistic take is reflected in consensus forecasts for the UK economy. Independent forecasters expect growth to pick up from around 0.8% in 2024 to 1.3% in 2025. But this would still be less than the 2% assumed by the OBR for the Budget.

Is the UK in disinflation?

Bank of England rate-setter Megan Greene said disinflation in the UK is set to continue despite an acceleration in consumer-price growth in the near term.

Charlie Mungers Dire Warning About Deflation

Will the UK ever have deflation?

Deflation looms in the UK, and its potential impact on the economy is becoming a growing concern. Recent data shows that in December 2025, UK shop prices saw their sharpest decline in over 3 years, with annual shop price deflation reaching 1%, up from 0.6% in November.

Is Britain on the brink of recession?

UK GDP Looks Weak, But Recession Isn't Here Yet

Recently that malaise has prompted a host of regulatory, pension and ISA reforms to drive investment and activity in the economy. While the UK's GDP figures have been disappointing, a recession still looks distant.

Is the UK falling behind other rich economies?

The UK lags behind every other G7 country when it comes to business investment as a share of our economy. That means the UK has fallen behind in the race for new jobs, new industries, and new technology.

Will there be a recession in 2025?

The odds that the economy will slip into a recession are nearly 50-50, and the time of greatest vulnerability will run from late 2025 to early 2026, according to Moody's Analytics chief economist Mark Zandi.

Why is the UK so expensive?

High land prices mean higher rents and higher wage demands, both of which push up costs for retailers. Then they have to charge more for their goods and services. VAT, at 17.5 percent, is much higher than the sales taxes in the US. High fuel duties don't help either, since most goods have to be transported.

Who benefits during deflation?

On its face, deflation benefits consumers because they can purchase more goods and services with the same nominal income over time.

Should we be worried about deflation?

Possible Effects. There are many reasons to be concerned about a prolonged deflationary period, even without an event as devastating as the Great Depression: Demand for goods decreases since consumers delay purchases, expecting lower prices in the future.

Will there be inflation or deflation in 2025?

US inflation outlook: A squeeze higher in second half of 2025. Our current US outlook can be characterized as “stagflation-lite”—growth running below trend coupled with inflation that is uncomfortably heading higher into year-end.

What will the UK be like in 2030?

By 2030, the UK will have the fastest growing and second largest population in Europe: This growth will vary across geographies. England's population is projected to grow by 5.0%, with much of this focused in the South East.

What is the UK economy prediction for 2026?

UK GDP growth is expected to remain subdued at 0.9% in 2026, before rising to 1.5% in 2027, matching the predictions made in April's Spring Forecast.

How does France make money?

What is France's main economic sector? The main economic sector in France is the services sector, which accounts for about two-thirds of GDP. This includes activities such as retail, tourism, financial services, and government spending. However, industry also plays an important role in the economy.

What are the warning signs for the UK recession in 2025?

Economic uncertainty is on the horizon, with experts raising concerns about a potential UK recession in 2025. Warning signs like persistently high interest rates, stagnant growth, and global supply chain pressures have left many SMEs wondering how best to prepare.

Are we in a depression right now?

Right now, the nation has not tipped into recession — and certainly not a depression, either. A depression is an extended economic breakdown, and we have not seen signs of that kind of pain. (See recession vs. depression.)

Is Spain going into recession?

Economic activity to remain robust

Economic activity in 2024 expanded by 3.2%, underpinned by the strong increase of consumption and by the positive contribution of net external demand. The economic expansion continued in the first quarter of this year, with GDP edging up by 0.6%.

What to buy during deflation?

Deflation hedges include investment-grade bonds, defensive stocks (those of consumer goods companies), dividend-paying stocks, and cash. A diversified portfolio that includes both types of investments can provide a measure of protection, regardless of what happens in the economy.

Is deflation good for savers?

While this benefits savers in the short term, it can hurt investors in stocks and real estate, as businesses struggle with lower consumer demand and shrinking profits. Bonds may perform better during deflation, as central banks tend to lower interest rates to stimulate the economy.

Is the UK struggling with inflation?

Inflation remains higher than expected

Inflation, as measured by the Consumer Prices Index (CPI), rose to 3.6% in June 2025. This was its highest level since January 2024. As the chart on the left below shows, this puts the UK's inflation higher than most EU countries (the EU average was 2.3% in June).

Is living in the UK still worth it?

Living in the UK is appealing if you appreciate a multicultural environment with access to quality healthcare and education. The UK is particularly attractive for those considering studying abroad or looking for diverse visa options. However, it's essential to be comfortable with the cost of living and the climate.

Is the UK or USA cheaper?

Zooming out, and taking the two countries as a whole, we find that it's cheaper to live in the U.K. than it is to live in the U.S. Overall, there's a 15.5% difference. However, Americans come out ahead when it comes to local purchasing power: it's 18.5% higher in the United States.

What is the average salary in the UK?

Average salary UK – a comprehensive overview. The median UK salary is £31,461 and the mean UK salary is £36,834 per year. These numbers change significantly when you look at differences between industries, educational backgrounds, age, gender or regional differences.