The long-predicted recession in the UK economy is still considered likely, even after the growth that was recorded in November. All that has happened is that it has been deferred for a single quarter.

In order for a recession to have begun in the fourth quarter of last year, activity would have had to virtually collapse in December. Although there will have been a hit for the industrial action that has been widespread across the public sector, its effect will be seen more in the current period.

It was reported yesterday that despite interest rates rising at every MPC meeting since December 2021, there is a significant disparity in how much borrowers are being charged by major lenders and credit card companies, compared to how much savers are being paid on deposits.

Since depositors have not seen a return on their savings in a decade, they are no longer savvy in searching out the best deals and have simply left funds in non-interest bearing accounts.

At the next MPC meeting which takes place on February 2nd, there is unlikely to be any change in monetary policy unless there is a major surprise in the December inflation report which is being delivered tomorrow.

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