UK Economic Forecast
September 25, 2018The economy has performed better than expected so far in the third quarter. Economic growth was robust in July, driven by the services sector. In addition, both consumer confidence and the services PMI rose in August, while retail sales in the first two months of Q3 have been strong. Moreover, the labor market is in rude health; the unemployment rate remains at a multi-decade low, and in the May–July period there were signs that this tightness was beginning to feed through to wages. However, economic figures in recent months have likely been flattered by unseasonably warm weather. Furthermore, although service activity is holding up, the manufacturing sector is losing steam as the competitiveness boost from the weaker pound fades, with the manufacturing PMI falling to an over two-year low in August. On the political front, the recent Salzburg summit highlighted the substantial disagreements between the EU and the UK over important aspects of Brexit negotiations. Both sides are looking to make substantial progress before another key EU summit on 18 October.
United Kingdom Economic GrowthGrowth will likely be fairly limp going forward, as temporary factors which have propped up the economy in recent months subside, fixed investment continues to be depressed by Brexit uncertainty and export growth slows after the temporary boost provided last year by the weaker pound. However, a slight pick-up in government spending should provide some support. A failure to reach a Brexit agreement with the EU before the UK departs in March 2019 is the key downside risk. Our panelists estimate GDP growth of 1.3% in 2018 and 1.4% in 2019, unchanged from last month’s forecast.
United Kingdom Economy Data
5 years of United Kingdom economic forecasts for more than 30 economic indicators.
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United Kingdom Facts
|Bond Yield||1.42||-3.04 %||Oct 18|
|Exchange Rate||1.30||-0.35 %||Oct 18|
|Stock Market||7,027||-0.26 %||Oct 18|
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United Kingdom Economic News
October 17, 2018
Consumer prices rose 0.1% in September over the previous month, down from August’s 0.7% rise.
October 17, 2018
In the June-August period the unemployment rate stayed at 4.0%, the joint-lowest rate since 1975 and below the Central Bank’s estimate for the equilibrium unemployment rate of 4.25%.
October 11, 2018
According to monthly GDP data released by the Office for National Statistics (ONS), economic activity was unchanged in August over the prior month in seasonally-adjusted terms, undershooting market analysts’ expectations of 0.1% growth.
October 11, 2018
Industrial production increased 0.2% in August over the prior month according to the Office for National Statistics, down from July’s revised 0.4% rise (previously reported: +0.1% month-on-month).
United Kingdom: The services sector softens slightly in September while the manufacturing sector picks up
October 3, 2018
In September, growth in the UK services sector lost some steam, with the IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) dipping to 53.9 from 54.3 in August.