Standard Chartered reduces growth expectations and provides analysis of the labor market in Britain.

Analysts from the British investment bank Standard Chartered have lowered their economic growth forecasts for the UK for the entire year of 2025 from 1.3% to 1%, against the backdrop of weak economic activity witnessed by the country during the second half of last year.

It is worth noting in this regard that official data released this morning showed that the UK's economy grew by 0.1% in the fourth quarter of 2024, and by 0.9% for the entire year.

In this context, Standard Chartered analysts still expect slightly stronger growth in 2025, supported by gradual monetary easing for households, and UK government measures favoring growth could help boost capital investment.

However, due to the lack of momentum for economic growth in the UK during the second half of 2024, coupled with the likelihood of tightening fiscal policy regarding spending in the coming months, the bank has revised its economic growth forecast for the UK to 1% from the previous expectation of 1.3%.

As for the UK labor market, analysts at the bank expect the job market to weaken further, as companies face challenging economic conditions, which could exert downward pressure on wage growth, increasing the risks of a faster interest rate cut by the Bank of England.

Looking at the weak growth momentum and rising energy costs, demand for labor could face continued pressures in the future; the investment bank's economists clarified that the Bank of England's response to labor market data is not immediate, considering not only this year's inflation dynamics but also issues with data quality on the labor market side.

However, overall, the Bank of England is likely to accelerate the pace of interest rate cuts if labor market data in the UK clearly indicates a deterioration in conditions.