Carla Nunes and James Harrington of Kroll provided 15 September 2022 UK economic growth estimates at last month’s ICAEW Annual Business Valuation Conference.

Kroll’s current estimate for the UK is 3.4%. Not surprisingly, they are projecting a flat 2023. Their current estimate for UK economic growth in 2023 is 0.2%.

Growth estimates have been less reliable since COVID-19, from Kroll and all other sources, from the IMF on down. This has also been true in the Blue Chip Economic Forecast data that BVR’s economic data rely on. (The UK MSCI for 2022 is -10.8%, and, since April 2022, it’s up 33%. No wonder growth estimates are less reliable.)

In addition, the risk-free rate is changing after a long period of stability. Ten-year yields in the UK are more volatile than in any period other than the 2008 downturn. The risk-free rate (RfR) in the UK was close to 1% at the beginning of the year and peaked at 3.2% last week. (The U.S. RfR is now at 3.5%.) Inflation has stayed stable (now at 9.9% in the UK, according to Kroll) but still at a 40-year high.

As evidence, Harrington mentioned that the consensus of economists projected 2022 economic growth for the eurozone at 4.3%. As of 15 September, this projection had dropped to 2.6%, and many now suggest that the final number will be revised down further.