UK Economic Forecast
October 27, 2020The economy likely recovered some lost ground in Q3 following Q2’s record contraction. GDP rose solidly in July and August, while retail sales were robust throughout the quarter. However, PMI data suggests the recovery lost momentum in September and early in Q4, due to the snap-back of restrictions at home and abroad. In response to tougher domestic Covid-19 measures, the government has recently ramped up fiscal support, announcing a revamped version of the furlough scheme for firms forced to close temporarily, in addition to a previously announced pledge to pay part of the wages of employees working less than normal hours. However, the support will likely be unable to prevent a sharp rise in unemployment in the coming months. On Brexit, talks with the EU have intensified in recent days. Reaching a trade deal will be vital to minimizing economic damage once the transition period ends on 31 December.
United Kingdom Economic GrowthThe economy should recover next year from this year’s collapse, supported by the likely easing impact of Covid-19, and fiscal and monetary stimulus. However, Brexit disruption as the UK adjusts to more limited access to the EU market could constrain momentum somewhat. A potentially messy divorce from the EU and prolonged social distancing measures pose downside risks. FocusEconomics panelists expect the economy to expand 6.0% in 2021, which is down 0.5 percentage points from last month’s forecast, and 3.1% in 2022.
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
November 20, 2020
Consumer confidence came in at minus 33.0 in November, down from October's minus 31.0 and marking the worst reading since May, as lockdown restrictions were tightened around the UK. The fall came on the back of a deterioration in consumers’ views on their financial situation over the next 12 months.
November 18, 2020
Consumer prices were unchanged in October over the previous month, which was below September's 0.41% rise.
November 12, 2020
Economic activity rebounded in the third quarter, with GDP growing 15.5% on a seasonally-adjusted quarter-on-quarter basis, contrasting the 19.8% contraction logged in the second quarter.
United Kingdom: Labor market remains soft moving into Q4, although furlough extension should support jobs ahead
November 10, 2020
According to the ONS, in July–September the unemployment rate rose to 4.8%—an over three-year high—while redundancies rose at a record pace in quarter-on-quarter terms.
November 5, 2020
At its meeting ending on 4 November, the Bank of England (BoE) maintained the policy rate at a record low of 0.10%, where it has remained since March’s combined 65 basis points of cuts.