UK Economic Forecast
December 20, 2019The economy appeared to perform poorly in the fourth quarter, as elevated political uncertainty weighed on activity. Both the services and manufacturing PMIs were in contractionary territory in the period, with firms blaming Brexit and weak external conditions for the soft patch. The labor market, however, remained a chink of positivity: In August–October, employment returned to growth and wage gains were robust, which should be supporting private consumption somewhat. Meanwhile, in politics, the Conservative Party won an absolute majority in the December elections. As a result, the UK should leave the EU by end-January, and the new administration will likely implement fiscal stimulus, supporting economic activity. However, the government’s recent decision to legislate against an extension to the transition period—which will run until end-2020—leaves the possibility of a no-deal exit next year, which will keep investment muted.
United Kingdom Economic GrowthThe economy is likely to grow moderately next year. While a looser fiscal stance should aid momentum, lingering uncertainty over the future of the UK-EU trading relationship and the possibility of a no-deal exit at end-2020 will contain business investment. A possible unravelling of trade negotiations with the EU and global trade tensions pose downside risks. FocusEconomics panelists expect GDP growth of 1.1% in 2020, which is up 0.1 percentage points from last month’s forecast, and 1.4% in 2021.
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
January 24, 2020
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from a revised 50.0 in December (previously reported: 49.0) to 52.9 in January, the highest reading in over one year and above the threshold that separates expansion from contraction in activity.
January 21, 2020
The unemployment rate was stable at 3.8% in the September–November period, a multi-decade low.
United Kingdom: Inflation declines further below target in December, leaving door open to monetary easing
January 15, 2020
Consumer prices were flat month-on-month in December, following November’s 0.2% rise.
January 13, 2020
Industrial production fell 1.2% in November compared to the prior month, contrasting October’s revised 0.4% expansion (previously reported: +0.1% month-on-month).
January 13, 2020
According to monthly GDP data released by the Office for National Statistics (ONS), economic activity shrank 0.3% in November over the previous month in seasonally-adjusted terms (October: +0.1% month-on-month, previously reported: +0.0% mom), undershooting market expectations of a flat reading.