UK Economic Forecast
July 24, 2018The economy appears to have picked up steam in Q2, but growth was likely still mediocre. Monthly GDP data for April and May shows the economy was supported by a solid expansion in the services sector, particularly wholesale and retail trade. However, this was at least partly due to a prolonged period of good weather boosting consumer spending. The strong performance of the services sector appears to have carried over to June, with the services PMI reaching its highest level since Q4 2017. The labor market paints a mixed picture; although the employment rate is at an all-time high, wage growth dipped in March–May. Coupled with pessimistic consumer sentiment, this suggested the recent upturn in consumer spending may not last. On the political front, the cabinet finally agreed on a common Brexit stance in early July. However, domestic political instability has subsequently increased, and the EU is likely to have serious objections to the government’s plans for the future trading arrangement.
United Kingdom Economic GrowthLooking ahead, growth will be subdued, with fixed investment depressed by Brexit uncertainty and export growth slowing after the 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 a substantial downside risk. Our panelists estimate GDP growth of 1.3% in 2018, down 0.1 percentage points from last month’s forecast, and 1.4% in 2019.
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||1.33||-3.04 %||Aug 07|
|Exchange Rate||1.29||-0.35 %||Aug 07|
|Stock Market||7,718||-0.26 %||Aug 07|
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United Kingdom Economic News
United Kingdom: Unemployment rate hits fresh multi-decade low in April-June, but wage growth continues to moderate
August 14, 2018
In the April-June period the unemployment rate fell to 4.0%, down from 4.2% in March-May and marking the lowest rate since 1975.
August 11, 2018
Industrial production increased 0.4% in June over the prior month according to the Office for National Statistics, contrasting May’s 0.2% decline (previously reported: -0.4% month-on-month).
August 11, 2018
The economy found its feet in the second quarter of 2018, according to preliminary data released by the Office for National Statistics (ONS) on 11 August.
August 3, 2018
In July, growth in the UK services sector was the slowest since April, with the IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) falling to 53.5 from 55.1 in the previous month.
August 2, 2018
At its meeting ending on 1 August, the Monetary Policy Committee (MPC) of the Bank of England (BoE) voted unanimously to raise the Bank Rate from 0.50% to 0.75%.