36. Weekly Newsletter

UK economic outlook boost

The UK’s economic narrative has been extremely pessimistic ever since the seemingly lacklustre post-Covid economic recovery. However, this week saw revised figures released by the Office for National Statistics (ONS) which contradicts this narrative. It was found that UK GDP in late 2021 exceeded pre pandemic levels rather than contracting. This is evident by revised ONS statistics which show that instead of GDP being 1.2% smaller in late 2021 than pre Covid levels, it was actually 0.6% larger. This marks a significant change in outlook for the UK economy as by mid-August this year, it was shown in official data that GDP had still not reached pre pandemic levels. This takes the UK from being the worst performing economy in the G7 and a global anomaly, to being ahead of countries like Germany and in line with France.

This £50 Billion disparity in GDP data will likely lead to an inquiry as such a significant disparity in data inevitably results in a distinct difference in decision making. This sentiment is displayed by Simon French, chief economist of investment bank Panmure Gordon, who stated that previous data, placing the UK as a global outlier, “undermined Britain’s reputation abroad” and the revisions have “cast huge doubt on recent investor conclusions”. The ONS have explained several reasons as to how they misfired on GDP calculations; In 2020, ONS now believes that companies were adding to “piles of unsold stocks” rather than running them down. They also found that the health sector and wholesales companies experienced far more lucrative periods as they “streamlined their cost bases” in 2021.

Newspapers

The UK’s front page news cycle over the last seven days covered a wide range of topics with no single issue dominating the headlines. UK house prices fell at fastest pace since 2009 as interest rates remain high. Furthermore, it was found the Britain is facing the biggest jump in old age costs across Europe. Some of the newspaper front pages from the last week were:

• Financial Times: UK house prices fall at fastest rate since 2009
• The Sunday Telegraph: Sunak is finally standing up to the green blob
• The Sunday Telegraph: Britain facing biggest jump in old age care across Europe
• The Times: Premature regulation could stifle AI in London
• The Times: Contributions to pensions must double, says Abrdn chief
• Financial Times: Concrete evidence: UK’s school buildings failure goes back decades
• Daily Express: Rishi Sunak to ‘overturn onshore windfarm ban’ bowing to party pressure
• Financial Times: UK interest rates may not rise further, says Bank of England’s top economist
• The Sunday Telegraph: Oil prices rise on longest run since January
• Financial Times: UK consumer spending ‘rebounds’ in August

UK AI expansion

The Home Office is looking to expand the use of controversial facial recognition technologies. The UK government is exploring the use of technology in which live facial recognition is used on the public to scan for criminals or troublemakers. Concerns have risen about the potential breach of human rights to privacy and the invasive nature of AI live facial recognition.

Former deputy mayor of London stated last year that there is an “urgent need” for new legislation on live facial recognition and concluded that a moratorium must be enacted. This sentiment appears to be the case in most of Europe as the European parliament is moving towards banning the use of AI live facial recognition in public spaces due to the blanket use of the technology being a breach of the rights of citizens. The UK, by contrast, has moved to ramp up this controversial technology as plans were announced this week to deploy new biometric systems nationally over the next 12 to 18 months.