United Kingdom Economic Forecast

UK Economic Forecast

September 26, 2017

Incoming data for Q3 is mixed. On the positive side, the manufacturing sector rebounded in July, and a rise in the manufacturing PMI in August signals an acceleration in the expansion of output. A healthy labor market propelled the unemployment rate to another multi-decade low in July amid signs of a mild recovery in real wage growth. Consumer sentiment edged up in August, indicating brighter prospects for private consumption. On the downside, growth in total industrial production fell in July. In August, the housing market cooled further and the services PMI dropped. Brexit uncertainty continues to deter investment, and Prime Minister May’s speech on 22 September failed to offer sufficient clarity on the UK’s desired trading relationship with the EU. Hours after the speech, Moody’s downgraded the country’s credit rating by a notch to Aa2 from Aa1 and changed the outlook from negative to stable, citing mounting policy challenges around the complexity of Brexit negotiations.

United Kingdom Economy Data

20122013201420152016
Population (million)63.764.164.665.165.6
GDP per capita (USD)41,68142,46646,48443,96340,093
GDP (USD bn)2,6552,7223,0032,8622,629
Economic Growth (GDP, annual variation in %)1.31.93.12.21.8
Domestic Demand (annual variation in %)2.01.93.52.11.5
Consumption (annual variation in %)1.71.62.22.42.8
Investment (annual variation in %)2.33.26.73.40.5
Exports (G&S, annual variation in %)0.61.11.56.11.8
Imports (G&S, annual variation in %)2.93.42.55.52.8
Industrial Production (annual variation in %)-2.7-0.71.51.21.2
Retail Sales (annual variation in %)0.61.04.14.34.9
Unemployment Rate8.07.66.25.44.9
Fiscal Balance (% of GDP)-8.2-5.6-5.7-4.3-3.0
Public Debt (% of GDP)85.186.288.189.089.3
Money (annual variation in %)5.55.46.25.93.1
Inflation Rate (CPI, annual variation in %, eop)2.72.00.50.21.6
Inflation Rate (CPI, annual variation in %)2.82.61.50.00.7
Inflation (PPI, annual variation in %)2.11.30.0-  -  
Policy Interest Rate (%)0.500.500.500.500.25
Stock Market (annual variation in %)5.814.4-2.7-4.914.4
Exchange Rate (vs USD)1.631.661.561.471.23
Exchange Rate (vs USD, aop)1.591.561.651.531.36
Current Account (% of GDP)-3.7-4.4-4.7-  -  
Current Account Balance (GBP bn)-61.4-76.4-85.0-  -  
Trade Balance (GBP billion)-110.9-120.7-122.6-  -  
International Reserves (USD)88.692.495.7119124

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United Kingdom Facts

ValueChangeDate
Bond Yield1.37-2.00 %Oct 16
Exchange Rate1.33-0.27 %Oct 16
Stock Market7,527-0.11 %Oct 16

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United Kingdom Economic Growth

September 26, 2017

The economy is expected to slow this year as rising inflation erodes consumers’ purchasing power. It is also expected to slow next year as prolonged Brexit uncertainties continue to deter investors. However, the Bank of England’s ultra-loose monetary policy stance and resilient global demand should cushion the slowdown. Our panelists estimate GDP growth of 1.6% this year and 1.3% in 2018, which is unchanged from last month’s forecast.

United Kingdom Economic News

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