Economic Outlook 2024: Forecasting, Inflation & Interest Rates

Turnkey Exchange

Join us for another series of the Turnkey Exchange, as Mark Simpson welcomes special guest, Jeavon Lolay of Lloyds Bank, to discuss the economic outlook for 2024.

Recession. Resilience. Redesign. In a post-pandemic world, what is the new normal?

In Episode 1 of our Economic Outlook 2024 series, Mark is joined by Jeavon Lolay of Lloyds Bank to discuss forecasting, inflation and interest rates, and their impact on the economic outlook for the UK over the coming year.

Jeavon will return to the Turnkey Exchange for the final episode in this 2-part series, where he will be discussing the impact of AI, Climate Change & the Distribution of Wealth on his industry, and the influence of these areas on the UK’s economic outlook for 2024.

Meet Our Speakers

Mark Simpson

Mark Simpson

Product Specialist, Turnkey

Prior to joining the team at Turnkey as a Product Specialist in 2022, Mark spent over 20 years working within the insolvency industry, garnering a greater understanding of the systems, processes and challenges facing the industry.

Jeavon Lolay

Jeavon Lolay

Head of Economics & Market Insight, Lloyds Bank Commercial Banking

Jeavon leads the Economics & Market Insight team, primarily focusing on the UK and global developments that impact major financial markets. His team communicates the views of Lloyds Bank externally, both through regular written commentary and formal presentations. Jeavon regularly presents at events across the UK and internationally.

Have you ever wondered what it’s like being an economist in recent years? Welcoming Jeavon to the Turnkey Exchange, Mark opens the floor to Jeavon to share his experience of the last few years, amid all of the uncertainty surrounding global events.

Summarising his experience, Jeavon recalls a state of constant alert, keeping on top of events and changes on a daily basis and being very much in demand. Highlighting that there have been very few areas that affect the world economy that they haven’t touched on, Jeavon shares how enjoyable he has found being an economist during this period.

Picking up on the pace of change, Mark queries how difficult it must be to give longer term predictions in these instances. Jeavon responds providing an insight into forecasting and conditioning assumptions, using a Google Maps analogy to round-off his response.

“If I was sitting here today and I was using Google Maps trying to work out travelling to my local supermarket. Assuming everything is okay, then the journey might be 12 minutes. But I don’t know if there’s going to be a car broken down there, so that means I’ll be 25 minutes. It doesn’t mean that my forecast was bad, it just means that one of my conditioning assumptions was wrong.

Jeavon Lolay, Head of Economics & Market Insight at Lloyds Bank

Jeavon Lolay

Casting a spotlight on the coming months, and potentially longer term as well, Mark and Jeavon discuss what’s been happening more recently and where things are going to go. Jeavon comments on recent data, showing that we have been in a recession, but notes that it’s probably one of the mildest recessions we’ve ever experienced and remains cautiously optimistic in terms of the growth outlook.

Jeavon Lolay

“It definitely does feel like there’s a bit more of a spring in the economy. The economy does look to be on a stronger footing, so I think, I’m relatively confident, I’d say, that the recession may already be over. And I think we’ll see confirmation of that in the next few months. So, I’d say I’m cautiously optimistic in terms of the growth side.”

Jeavon Lolay, Head of Economics & Market Insight at Lloyds Bank

Adding further comment, Jeavon describes the resilience of households and businesses as remarkable given the challenges faced over the last few years, from multi-decade high inflation, to energy shocks and political uncertainty.

Continuing with the theme of inflation, Mark and Jeavon discuss the significant drop and the global theme of disinflation driven by falling energy prices.

“The challenge that we have now is one which we’d normally term, one of persistence. We may get back down towards 2%, we may even go below 2%. But the question is, can we sustainably stay 2% or below?”

Jeavon Lolay, Head of Economics & Market Insight at Lloyds Bank

Jeavon Lolay

Moving on to interest rates, Jeavon describes the interest rate outlook as very volatile and talks of concerns of persistence and a tight labour market, although notes that this is not as tight as it was last year or the year before, with companies now less concerned about labour shortages than they were previously.

With the increase in the National Living wage, Mark and Jeavon discuss the impact on small to medium-sized businesses and the challenge this mandated change will bring to different sectors.

Following on, Mark asks Jeavon about the different surveys Lloyds Bank use to gain a greater understanding of the wider UK economy, with one being mentioned in the latest budget. Jeavon then shares the 3 biggest concerns about the economic outlook from the 1200 firms that they poll on a monthly basis, along with the main strategic priorities of these firms for 2024.

Rounding off the episode, Mark and Jeavon discuss the flipside of a crisis and the opportunities that become available to businesses off the back of one, if they can be nimble and make decisions quickly now that we’re dealing with a faster pace of change.

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