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
5 years of United Kingdom economic forecasts for more than 30 economic indicators.
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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
United Kingdom: Furlough scheme continues to buttress the labor market, notwithstanding fresh lockdown
February 23, 2021
According to the ONS, in October–December the unemployment rate rose to 5.1%—an over four-year high, and up from 5.0% in the previous rolling quarter.
February 19, 2021
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from 39.5 in January to 49.7 in February.
February 18, 2021
Consumer confidence came in at minus 23.0 in February, up from January's minus 28.0.
February 17, 2021
Consumer prices dropped a seasonally-adjusted 0.20% in January over the previous month, contrasting the 0.26% rise logged in December.
February 12, 2021
Industrial output increased 0.2% in month-on-month seasonally-adjusted terms in December, which followed November's 0.3% increase.