Low potential growth | 05 December 2022

05 December 2022, GBP/USD

Low potential growth

GBPUSD trading plan:

Britain’s growth potential has fallen behind every large economy except Mexico due to collapsing productivity and severe labor market shortages, according to former Bank of England rate-setter Michael Saunders. Saunders, who finished his term at the UK central bank in August, said his analysis of 43 country forecasts by the Organization for Economic Cooperation and Development showed the UK’s economic “speed limit” will be the second lowest in the group for the period from 2020 to 2024. Potential output, a mixture of productivity and workforce growth, is a measure of how fast an economy can expand before generating inflation. The findings suggest little hope that Prime Minister Rishi Sunak’s government can escape economic stagnation and inflation that are delivering the sharpest squeeze on consumers in memory.

Investment idea: range 1.2260 - 1.2360

David Johnson
Analyst of «FreshForex» company
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