UK key trends in 2022

Last year, we published our predictions for the UK in 2021, through our UK Economic Outlook. As we enter 2022, while there still are a considerable number of uncertainties, this report revisits our previous predictions and provides our new predictions for the year ahead.

Streets of terraced houses from above

What are the key trends the UK will experience in 2022?

1. By the end of 2022 four in every ten directorships in the FTSE 100 will be held by women. Although the pandemic has had a disproportionate impact on women in the labour market, we expect that at the board level the share of women in the biggest 100 companies listed in the UK will continue to increase, partly due to rising pressure from government and investors to have more women in the leadership roles.

2. Health and well-being indicators set for record adverse spikes as a result of pandemic measures, and this could adversely impact the economy in the long run. We expect a less active lifestyle - caused by restrictions, more screen time, and a higher level of stress - to drive obesity rates to a new record high for both adults and children as the knock-on impacts of COVID take their toll.

3. Household savings rate is likely to drop to the pre-COVID level in 2022, cutting about 70% (or £4,000) of the extra savings in real terms compared to the highest level seen during the pandemic. We expect a combination of higher spending demand post-restrictions, increased mortgage payments as interest rates hike, and high inflation to squeeze household savings in the short to medium term. Therefore, the household saving rate in 2022 will likely fall back to the pre-crisis level, and it could drop further if high inflation prolongs beyond 2023 or wage growth slows down more than expected.

4. Despite the January crash, cryptocurrency value could almost double the 2021 value, hitting $4 trillion in market value globally by the end of 2022. We expect that investors’ desire for an alternative investment in a low interest rate and high inflation environment, combined with the introduction of new technologies which can hedge against certain risks, could boost market expansion. However, given the risky and volatile nature, if the crypto market collapsed, it would be equivalent to the size of Germany's economy - the largest economy in the EU - being completely wiped out.

5. There could be a record number of heat pumps sold across the UK in 2022, potentially triple the number sold in 2020. We expect changes in consumer attitude toward an environment friendly lifestyle, rising energy bills, and Government grants for heat pump installation starting this year to boost heat pump sales.

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