UK Economic Outlook Q1 2022

Forecast summary:

• CBRE forecast GDP growth of 3.3% in 2022 and 1.1% in 2023.
• We expect inflation to peak at 9.2% in Q2 2022 and remain elevated throughout 2022. That said, we still think there are strong reasons inflation will fall back towards 2% in 2023. Secondhand car prices have come off the boil and oil and gas futures prices are now downward sloping.
• With inflation high and rising, we expect interest rates to rise accordingly. Bank Rate is likely to reach nearly 2% by the end of the year.
• 10-year gilt yields have risen sharply since the beginning of the year, and we believe they will continue rising throughout the year. We forecast the 10-year gilt yield reaching 2.1% by the end of the year