UK Economic Forecast
May 31, 2022GDP growth was well above the European average in Q1, as the removal of virtually all Covid-19 restrictions supported private consumption. Moreover, fixed investment accelerated from Q4 due to a large expansion in government investment. However, business investment contracted, while exports fell sharply. Moreover, growth only occurred early in the quarter, as monthly data shows GDP flatlined in February and shrank in March, as the cost-of-living squeeze intensified. Moving to Q2, PMI data for April and May suggests a sharp loss of momentum, in line with record inflation, all-time low consumer sentiment and renewed supply chain difficulties. In May, the government announced a GBP 15 billion cost-of-living package, with measures including a discount on energy bills for all households, and fiscal transfers to low earners. The measures will support activity, but potentially at the cost of generating extra inflation.
United Kingdom Economic GrowthThis year, growth will slow sharply due to intense inflation and tighter monetary policy. Protracted conflict in Ukraine and new Covid-19 variants pose downside risks, while further fiscal support is an upside risk. Trade tensions with the EU have risen recently after the government announced plans to override the Northern Ireland Protocol, further clouding the outlook. FocusEconomics panelists expect the economy to expand 3.7% in 2022, which is down 0.1 percentage points from last month’s forecast, and 1.5% in 2023.
United Kingdom Economy Data
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United Kingdom Facts
|Bond Yield||0.83||-3.04 %||Jan 01|
|Exchange Rate||1.33||-0.35 %||Jan 01|
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United Kingdom Economic News
July 22, 2022
Consumer confidence was unchanged at June's record low of minus 41.0 in July.
July 22, 2022
The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) fell from 53.7 in June to 52.8 in July.
July 20, 2022
Consumer prices rose 0.80% over the previous month in June, picking up from May's 0.65% rise.
July 18, 2022
According to the ONS, in March–May the unemployment rate registered 3.8%, unchanged from the previous rolling quarter and close to its pre-pandemic level, while job vacancies eased from their previous record high in the three months to June.
July 13, 2022
GDP increased 0.5% month-on-month in seasonally-adjusted terms in May (April: -0.2% mom), beating market expectations of a flat reading.