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
June 24, 2022
Consumer confidence fell to minus 41.0 in June from May's minus 40.0.
June 23, 2022
The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) was unchanged at May's 53.1 in June.
June 22, 2022
Consumer prices increased 0.65% from the previous month in May, which was below April's 2.51% increase.
June 16, 2022
According to the ONS, in February–April the unemployment rate registered 3.8%, up 0.1 percentage points from the previous rolling quarter but close to its pre-pandemic level, while job vacancies set a new record high in the three months to May.
June 16, 2022
On 16 June, the Bank of England (BoE) increased the bank rate from 1.00% to 1.25%, marking the fifth successive rate hike.