Tracking the BoE's growing optimism for the last quarter of 2024

UK asset prices are being rocked by the global bond selloff in real time, but the underlying British economy is decidedly stronger than the Bank of England expected a year ago.

We've charted the BoE's recent forecasts for Q4 2024 economic growth. In February, the central bank was expecting relative stagnation, with an 0.5% year-on-year increase in real GDP for the quarter that just ended. By November, the BoE expected a 1.66% print on that basis for Q4. (To be sure, that marked a slowdown from its most optimistic forecast: 2.1%, in August.)

The official GDP figures for Q4 will be released on Feb. 13, days after the BoE updates its forecast. A growth pace of 1.66% would mark a substantial acceleration from the 0.85% GDP print for Q3.

The BoE's forecast for GDP is more optimistic than that of CEIC's weekly GDP nowcast, which is calling for 1.3% growth in Q4.

The difference between the two estimates could be related to their different frequencies. CEIC's machine learning-driven nowcast is updated weekly, while the BoE's most recent projection is almost two months old as of our time of publication.

The BoE updates its forecasts for the GDP, inflation and the unemployment rate quarterly, releasing estimates in February, May, August and November. We've added two final charts showing how the central bank has grown more optimistic about slower price increases and lower joblessness.

CEIC keeps an archive of these old forecasts because such data is crucial for testing statistical models. They allow analysts to run historic stimulations without the distortion known as look-ahead bias (where information only known in hindsight is included).

If you are a CEIC user, access the story here.