GDP in United Kingdom
United Kingdom - GDP (billions of U.S. Dollars)
Economy avoids recession in Q3 but remains frail
The UK economy dodged recession in the third quarter, growing 0.3% in quarter-on-quarter (qoq) seasonally-adjusted terms and contrasting the prior quarter’s 0.2% contraction. The Q3 figure was in line with the FocusEconomics Consensus Forecast. In annual terms, growth slumped to 1.0%, down from Q2’s 1.3% year-on-year expansion and marking the lowest figure since Q1 2010.
Private consumption continued to underpin activity amid low unemployment and solid wage rises (Q3: +0.4% qoq; Q2: +0.3% qoq), while government spending rose modestly (Q3: +0.3%; Q2: +1.1%). Contrastingly, fixed investment fell 0.2% in Q3 on lower public investment, less severely than Q2’s 0.9% contraction. A further inventory drawdown—following Q1’s significant stockpiling in preparation for a possible no-deal Brexit—also dragged on growth.
Exports grew 5.2% quarter-on-quarter in Q3, rebounding from Q2’s 6.6% contraction, despite adverse global trading conditions and soft momentum in the Eurozone. Meanwhile, imports grew 0.8%, contrasting Q2’s fall of 13.0%, with soft import figures in recent quarters largely reflecting an unwinding of stocks. As a result, the net contribution from the external sector was 1.2 percentage points, following Q2’s 2.6 percentage-point contribution.
Looking ahead, growth is likely to remain muted in the near term as continuing political uncertainty dampens activity. While solid private consumption should continue to prop up the economy, recent signs of ebbing momentum in the labor market—if they prove long-lasting—could begin to chip away at consumer spending. Uncertainty regarding the outcome of the UK’s exit from the EU is the key risk to growth going forward.
According to James Smith, an economist at ING, while “the ongoing distortions of Brexit continue to make the figures hard to read […] All in all, we think the economy is probably growing at a pace of roughly 0.2% per quarter.”
In its November inflation report, the Bank of England reiterated its 2020 growth forecast of 1.3% and slashed the 2021 forecast to 1.8%. Our panelists see the economy growing 0.9% in 2020 and 1.4% in 2021.
United Kingdom - GDP (USD bn) Data
|GDP (USD bn)||2,756||3,039||2,898||2,669||2,642|
5 years of economic forecasts for more than 30 economic indicators.
United Kingdom Facts
|Bond Yield||0.76||-3.04 %||Nov 21|
|Exchange Rate||1.29||-0.35 %||Nov 21|
|Stock Market||7,239||-0.26 %||Nov 21|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
December 4, 2019
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) decreased from 50.0 in October to 49.3 in November, below the threshold that separates expansion from contraction in activity.
November 29, 2019
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.5% month-on-month in November, up from October’s 0.2% increase.
November 29, 2019
The GfK consumer confidence indicator registered minus 14 in November, matching October’s figure.
November 13, 2019
Consumer prices fell 0.2% in October compared to the prior month, contrasting September’s 0.1% increase.
November 12, 2019
The unemployment rate edged down to 3.8% in July–September from 3.9% in the previous rolling quarter.