Business Monitor International


United Kingdom Business Forecast Report

Published 23 April 2014

  • 57 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
United Kingdom Business Forecast Report

Core Views

  • The UK economy is set to outperform most major developed states in 2014, and will continue to expand at a robust clip in 2015.

  • In light of positive structural economic reforms undertaken by the government, coupled with flexible monetary and exchange rate policies, we remain bullish on the long-term economic prospects for the UK relative to the eurozone over the longer term.

  • Despite numerous ructions between the ruling Conservatives and Liberal Democrats, we expect the coalition government to hold firm through to the next parliamentary election in 2015.

Major Forecast Changes

  • We have revised up our 2014 real GDP forecast to 2.9% from 2.6% previously

Key Risks To Outlook

  • Downside Risks To Medium-Term Growth: There are downside risks to our economic growth forecasts, particularly stemming from the impact of fiscal consolidation and the eurozone sovereign debt crisis. In the case of the latter, we stress that even though near-term crisis risks in the euro area have dissipated somewhat, the anaemic pace of structural reform means that the single currency union will remain vulnerable to renewed stresses.

Macroeconomic Forecasts (United Kingdom 2012-2015)
Indicator 2012 2013 2014f 2015f
Real GDP growth, % y-o-y 0.3 1.7 2.9 2.5
Nominal GDP, USDbn 2,484.6 2,500.8 2,809.7 2,867.4
Consumer price inflation, % y-o-y, eop 2.7 2.0 2.3 3.2
Exchange rate GBP/USD, eop 0.62 0.63 0.61 0.62
Budget balance, % of GDP -5.2 -5.8 -4.8 -3.8
Current account balance, % of GDP -3.8 -4.4 -4.4 -4.3
BMI/ONS

Click here to explore data

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Scottish Referendum Primer
8
Tab le: Politica l Overview
8
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Resurgence In Business Investment Bodes Well For Sustainable Recovery
14
Table: ECONOMIC ACTIVITY
14
Monetary Policy
16
Carney Paving The Way For Earlier Rate Hike
16
Table: MONETARY POLICY
16
Debt Policy
18
The Deleveraging Sweet Spot
18
Exchange Rate Policy
20
GBP: Pausing For Breath
20
Table: BMI Currency Forecast
20
Regional Economic Outlook
21
Assessing The Aftermath Of ECB Policy Action
21
Table: EXCHANGE RATE
21
Banking Sector
24
Aggressive Deleveraging To Continue
24
Chapter 3: 10-Year Forecast
25
The UK Economy To 2023
25
Outperforming The Eurozone Over The Long Term
25
Table: Long-Term Macroeconomic Forecasts
25
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Institutions
28
TABLE : BMI BUSINESS AND OPER ATION RISK RATINGS
28
Infrastructure
29
TABLE : BMI LE GAL FRAMEWOR K RATING
29
TABLE: LABOUR FORCE QUALITY
30
TABLE: TRADE AND INVESTMENT RATINGS
31
Market Orientation
32
TABLE : ANNUAL FDI INFLO WS
32
Operational Risk
33
Table: Top Export destinations (USDmn)
33
Chapter 5: Key Sectors
35
Pharmaceuticals & Healthcare
35
table: Pharmaceutical Sales, Historical Data And Forecasts
36
Table: Healthcare Expenditure Trends, Historical Data And Forecasts
37
Table: Government Healthcare Expenditure Trends, Historical Data And Forecasts
37
table: Private Healthcare Expenditure Trends, Historical Data And Forecasts
38
Tourism
39
Table: Inbound Tourism
40
Table: Outbound Tourism
41
Other Key Sectors
45
Tab le: Oi l and Gas Sect or Key Indicat ors
45
tab le: Telecoms Sect or Key Indicat ors
45
tab le: Inf rast ructu re Sect or Key Indicat ors
45
tab le: Food and Drink Sect or Key Indicat ors
46
tab le: Aut os Sect or Key Indicat ors
46
tab le: Defenc e and Secu rit y Sect or Key Indicat ors
46
Chapter 6: BMI Global Assumptions
47
Global Outlook
47
Global Recovery Still On Track
47
Table: Global Assumptions
47
Tab le: Developed Stat es, Real GDP Growt H, %
48
Tab le: BMI VER SUS BLOO MBER G CONSENSUS RE AL GDP GRO WTH FORE CASTS, %
48
Tab le: Em erging Markets , Real GDP Growth , %
49

The United Kingdom Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in United Kingdom and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of United Kingdom's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of United Kingdom's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise United Kingdom's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in United Kingdom, including currency volatility, the commodity price boom and protectionist policies.

The United Kingdom Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the United Kingdom economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for United Kingdom through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The United Kingdom Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for United Kingdom and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on United Kingdom, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in United Kingdom over the next 5-years?

BMI's United Kingdom country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the United Kingdom Market - Political Strengths, Weaknesses, Opportunities and Threats facing United Kingdom.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for United Kingdom's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark United Kingdom's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for United Kingdom, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of United Kingdom's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in United Kingdom will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in United Kingdom's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express