UK Key Country View

  • Fitch Solutions, expects that UK’s real GDP to grow by 6.0% in 2021 and by 5.0% in 2022 as fiscal and monetary policy remain supportive. Though risks to their growth projections remain skewed to the downside. 
  • The UK's current account deficit is expected to widen to 3.8% in 2021 from 3.5% in 2020 as a recovery-induced increase in imports outpaces growth in exports. 
  • The current account deficit should begin narrowing from 2022, coming in at 3.4% of GDP in 2022 and 3.3% in 2023 according to forecasts, largely on account of stronger export growth as Brexit-induced disruptions to trade gradually dissipate. 
  • Fitch expects that the Bank of England (BoE) will maintain accommodative monetary policy over the remainder of 2021 and in 2022. However, high and rising inflation, alongside above-trend growth expected for this year and the next, have led Fitch to revise its interest rate outlook slightly: it now expects the BoE to increase its main policy rate by 15 basis points (bps) to 0.25% in H222.

(Source: Fitch Solutions)