United Kingdom Current Account Balance (% of GDP)

Current Account in United Kingdom

The economy eked out a 0.1% quarter-on-quarter expansion in Q1. Strong fixed investment growth drove the reading, while private spending recorded a mild expansion. In contrast, public spending, exports and imports all contracted. Looking at the monthly picture, momentum waned as the quarter progressed, with strong growth in January followed by flat activity in February and a decline in March. Heading to Q2, available signs are mostly encouraging: In April, consumer confidence rose, and retail sales beat market expectations, while the composite PMI averaged higher in April–May than in Q1. That said, PMI data also suggested that the manufacturing sector is struggling amid falling exports and destocking by firms. Moreover, the extra bank holiday in May for the King’s coronation is likely to weigh on the Q2 GDP outturn.