Authored by NatWest’s economics team, this early-2026 outlook surveys UK, US, and European prospects as growth stabilises but momentum remains uneven.
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UK GDP growth is expected to hover near 1%, with cautious consumers, a sluggish labour market, and easing inflation limiting upside despite firmer public spending.
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Inflation is forecast to return close to target by spring, while interest rates approach neutral, constraining further monetary stimulus.
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The US retains relative strength on AI-driven investment and fiscal support, while Europe continues to lag amid weak demand and slower digital adoption.
Can modest growth endure if AI reshapes productivity but not confidence?
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