There have been high levels of uncertainty in 2021 within the financial sector and financial markets. From banks and insurances companies to payday loans direct lenders, what can we expect from financial news in 2022? With January right around the corner, we explore the various projections, estimating what financial news we can expect once the new year is upon us.
Within 2022, the UK economy is expected to recover from the Covid-19 pandemic, returning to its pre-Covid levels. This is expected to happen much more quickly than expected, according to the latest forecast released from the Office of Budget Responsibility.
The most recent figures seem to show that the pick-up growth has been largely impacted by the very successful Covid-19 vaccine rollout in the UK. Although the outlook appears to be positive in this respect, there will also be some inevitable downsides. As supply has struggled to meet the demand in many different forms such as workers, energy and issues in global supply, inflation has been predicted to reach peak levels of 4.4% by 2022.
What Else Can We Expect In 2022?
As aforementioned, the forecast of global inflation will be above 4%, which is a real issue for those who have been saving money for long periods of time, such as retirees. The target rate for 2022 was 2%, as predicted by the Bank of England, but this target may not be met. The cost of living will, in turn, increase as a result of this, which will cause issues on a national level.
Interest rates may even raise early as expected, which would send the prices of bonds and yields sky high. However, there are risks here. The risk is that when the bank raises rates, it would hinder the potential of the UK economy to accelerate to a more favourable position. On the bright side, as we are still one of the fastest growing economies in the world, there is still high hopes for a full financial recovery in the near future.
As the UK has seen a much sharper decline in economic growth than most advanced countries, the forecast may be somewhat conservative. The forecast is solely based on the predictions based within a pandemic, and as we all know, these can be inaccurate, have instability, and potentially change on a daily basis, depending on a variety of factors.
It must be noted that the 2022 forecast has already been downgraded and may continue to do so. Only time will tell in regards to whether the forecast will continue to see this downward trend. It is likely that as we enter 2022, all will be revealed in terms of the financial health of the UK.
Additionally, factors inclusive of further lockdowns and restrictions due to the Covid-19 pandemic may have a direct and potentially major impact on the UK and its financial stability. We appear to be in a safe position for the time being, but this will be determined for sure within the coming months.
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