UK Economic Forecast
August 27, 2019The economy unexpectedly contracted in the second quarter, driven by destocking following a surge in inventories in the first quarter, and suppressed fixed investment. More positively, private consumption was upbeat, on decade-high wage growth and solid job gains, while strong public spending also cushioned the fall. Although the external sector contributed to growth, this was driven by plunging imports, as exports contracted amid a tougher global trading environment. Looking to the third quarter, momentum is likely muted. While the services PMI rose in July, it signaled only modest growth, and the manufacturing PMI remained in contractionary territory. That said, robust retail sales in the same month suggest consumer spending is supporting activity in Q3, and an inventory build-up towards the end of the quarter in preparation for a no-deal Brexit could temporarily boost headline GDP.
United Kingdom Economic GrowthUnderlying momentum is likely to be meek in H2, held back by soft business investment and weaker growth in key trading partners. However, higher wages and a more expansionary fiscal stance should prop up activity, while inventory changes as firms prepare for a no-deal will likely distort GDP figures. The highly uncertain outcome of Brexit remains the key risk to the outlook. FocusEconomics panelists expect GDP growth of 1.2% in 2019, which is down 0.1 percentage points from last month’s forecast. For 2020, panelists also see the economy expanding 1.2%.
United Kingdom Economy Data
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United Kingdom Facts
|Bond Yield||0.43||-3.04 %||Sep 04|
|Exchange Rate||1.23||-0.35 %||Sep 04|
|Stock Market||7,311||-0.26 %||Sep 04|
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United Kingdom Economic News
September 10, 2019
The unemployment rate dipped to 3.8% in May-July from 3.9% in the previous rolling quarter, marking the joint-lowest rate since the 1970s.
September 9, 2019
According to monthly GDP data released by the Office for National Statistics (ONS), economic activity rose 0.3% in July over the previous month in seasonally-adjusted terms, up from June’s flat reading and beating market expectations of 0.1% growth.
September 9, 2019
Industrial production rose 0.1% in July over the prior month according to the Office for National Statistics, contrasting June’s 0.1% decreaseincrease and driven by growth in the manufacturing and water supply sectors.
September 4, 2019
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) decreased to 50.6 in August from 51.4 in July.
August 30, 2019
The GfK consumer confidence indicator registered minus 14 points in August, down from July’s minus 11 points.