In the media | 19 Mar 2024

LBC Radio: GDP Outlook

People walking along rundle mall in South Australia

Andrew Goodwin, Chief UK Economist at Oxford Economics, joins LBC Radio to discuss the latest GDP figures and how stronger retail sales drove the increase in January.

Listen to the interview below:

Lewis Goodall – Official figures show GDP increased 0 .2% in January following a contraction of 0 ,1% in December, driven in part by stronger retail sales. Andrew Goodwin is Chief UK Economist at Oxford Economics and is joining us on LBC News. Thank you for your time tonight. What do you make of the latest numbers we’ve seen?

Andrew Goodwin – GDP data can bounce around a lot from month to month, so it’s important not to get too excited about today’s pickup. But I think this is going to mark the start of a sustained recovery. We are seeing the benefits of lower inflation start to hit home. I think consumers are feeling a little bit better off. And we do expect that to mean that growth starts to pick up as we move through 2024.

Lewis Goodall – Well, you say consumers may be feeling slightly better of because of inflation coming down, but bills elsewhere are going up, aren’t they? particularly things like council tax.

Andrew Goodwin – They are, and certainly I think if you have a mortgage and you’re refinancing this year, then certainly you’ll feel the pinch as well. But I certainly think compared to what we saw through most of 2022 and 2023, the situation is looking less severe. We’re certainly not expecting a return to boom time, but we should see things gradually start to improve as we move through the year.

Lewis Goodall – I mean, 0 .2% does not sound very much and the economy is not really motoring, is it, by any stretch at the moment?

Andrew Goodwin – This is only one month’s figures. So, it’s a 0 point in a month isn’t too bad. But I think the good thing is, reverse is most of the fall we saw at end of last year. And I think as we move through the year, we get to the end the of year we should start to see some sensible growth on a sustained basis again. The issue is though, longer term is we’ve had now two years where the economy has effectively moved sideways. And even going back sort of before that, we have had a fairly long period of pretty soft growth. So I think, yeah, there is a genuine question as to whether we can return to more sustained strong growth over the medium term.

Lewis Goodall – When did we fall into this stagnation period? When do things start going wrong?

Andrew Goodwin – Well, the economies had really a whole series of different shops to contend with. We obviously had the pandemic and the good shortages then, then the sort of the Russia’s invasion of Ukraine and what happened to energy prices. And so really sort a whole series of shocks that have just sort of hit the economy. Really sort of after the reopening sort -of boost faded in early 2022, things have pretty much gone sideways from there on sort outwards. But yeah, I do think this is really the start of a more sustained pickup. I think we’ve really started to come out the other side of a lot of those shocks now. And if we don’t have any more shocks like those coming through, then I think a more stable period should allow a proper return to growth.

Lewis Goodall – Andrew Goodwin from Oxford Economics. Thank you for joining us. This is LBC News.

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