As a new Labour government takes charge of a struggling UK economy, 2025 presents a number of significant economic challenges. Rising National Insurance Contributions, slowing economic growth, and concerns about the sustainability of AI technologies all raise questions about the year ahead.
Sun 5 Jan 2025 12.55 CETHeading for the White House and a new(ish) Labour government in charge of a faltering UK economy, the onset of 2025 seems especially portentous. Forecasting is a mug’s game, as former Bank of England governor Mervyn King used to say about predicting exchange rates; but here are some of the big economic questions to ponder, as the new year gets under way: could turn to fund public services.
But it has fuelled a furious backlash – and set up a narrative that Labour has clobbered the economy. The rise in NICs is far from the only factor at work. Economic growth was already forecast to slow, with interest rates at 4.75% and the Bank fretting about inflation. City forecasters are not expecting a slump – they predict growth of 1.3% in 2025. The Office for Budget Responsibility expects 2%, as Reeves’s higher public spending boosts demand. And strong real wage growth should give consumers some much-needed spending power. But recent data suggest the risks have tilted very much to the downside. Some doubts are starting to emerge about AI. Analysis of financial statements by ChatGPT’s creator OpenAI has led some to argue it, from experts at the University of Glasgow. They argued that the “hallucinations”, which large language models such as ChatGPT produce – the things they continually make up – are not aberrations, but integral to the way they function.. And in a much more strident metric, the tech journalist Ed Zitron has been delving into financial statements from ChatGPT’s creator, OpenAI, to argue that it None of this is yet causing so much as a ripple in financial markets; but it is hard to shake a nagging doubt about whether these technologies can really live up to the extraordinary hype. Given the dominance of tech for the US financial markets, if that fear became more widespread, it would lead to a pretty dramatic shakeou
UK Economy Labour Party National Insurance Artificial Intelligence Economic Growth
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Australian Share Market Opens for 2025 Amidst Economic UncertaintyThe Australian share market begins 2025 with a focus on key economic factors like interest rates, inflation, and global politics. Despite a slight dip in the property market, Australia's overall economic performance in 2024 showed resilience with strong gains in US markets.
Read more »
Espresso Prices to Soar in 2025: Political Uncertainty Fuels Commodity Market VolatilityThe 2025 commodity market is expected to be characterized by significant price fluctuations due to unpredictable political events. The author highlights the importance of political forecasting in predicting commodity prices, emphasizing the role of key figures like Donald Trump, Xi Jinping, and Vladimir Putin. Coffee, oil, and trade policies are particularly scrutinized, with potential impacts on global supply and demand.
Read more »
Albanese Kicks Off 2025 Campaign Amidst Election UncertaintyPrime Minister Anthony Albanese begins 2025 on the campaign trail, aiming to rally support ahead of the federal election. Facing potential challenges to his Labor Party's majority, Albanese will contrast his vision for Australia's future with the Coalition's alternative.
Read more »
2025 Toyota RAV4 gets minor upgrades as new generation looms7NEWS brings you the latest local news from Australia and around the world. Stay up to date with all of the breaking sport, politics, entertainment, finance, weather and business headlines. Today's news, live updates & all the latest breaking stories from 7NEWS.
Read more »
NAB CEO Sees Favorable Economic Conditions in 2025National Australia Bank CEO Andrew Irvine expressed optimism about the Australian economy's long-term outlook, predicting favorable trading conditions in 2025 as interest rates decline. He highlighted the nation's strong job market and the Reserve Bank's anticipated interest rate cuts.
Read more »
Economists Predict Gradual Economic Recovery in 2025Leading economists anticipate a gradual easing of inflation and interest rates in 2025, offering some relief to millions struggling with the economic challenges of the past year. While the full impact of President Trump's tariffs remains uncertain, economists predict a slow but steady recovery in GDP growth as inflation subsides and consumer confidence improves.
Read more »