UK economic outlook Nick Stamenkovic, Group Economist Information - - PowerPoint PPT Presentation

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UK economic outlook Nick Stamenkovic, Group Economist Information - - PowerPoint PPT Presentation

Apr 19, 2023 360 likes •506 views

UK economic outlook Nick Stamenkovic, Group Economist Information classification: Public UK economy stuck in a low gear 1.2 1.0 2.3% 1.8% 0.8 1.8% 1.4% 0.6 0.4 0.2 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

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UK economic outlook

Nick Stamenkovic, Group Economist

Information classification: Public

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UK economy stuck in a low gear

Information classification: Internal 2

Source: ONS

0.0 0.2 0.4 0.6 0.8 1.0 1.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018

2.3% 1.8% 1.8% 1.4%

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UK economic growth set for moderate acceleration, especially compared to some peers

Information classification: Internal 3

GDP growth among the G7 economies

Annual change (%) by quarter

  • 1.0

0.0 1.0 2.0 3.0 4.0 2015 2016 2017 2018

UK

G7 Range

Forecast

Source: ONS

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SLIDE 4

Diverging trends

4 Information classification: Public

Source: ONS, Bank of England

  • 1.5
  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 Business Investment Household Spending

Household spending and Business investment (qoq)

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Real incomes are on the rise

Information classification: Internal 5

Source: ONS

Higher real wages

  • 3
  • 2
  • 1

1 2 3 4 5 6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average earnings (3mth yoy) CPI (yoy)

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Strong jobs growth

Information classification: Public 6

Source: ONS

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 100 200 300 400 500 600 700 800 900 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2017Q1 2018Q1 Employment growth Unemployment rate Annual change in empoyment, 000s Unemployment rate, %

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South East keeping its head above water

Information classification: Public 7

Source: NatWest PMI report

52.3 51.5

44 46 48 50 52 54 56 Wales Emids NW East SE SW Wmids Yorks UK London Scot NE PMI, February 2019

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Lacklustre housing market

Information classification: Public 8

Source: LSL, RBS economics

  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 16% J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2016 2017 2018 House price growth North West Yorks UK ex L&SE East South East London

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Sterling remains in the doldrums

Information classification: Public 9

Source: Bank of England

70 75 80 85 90 95 100 105 110 1990 1991 1992 1994 1995 1997 1998 1999 2001 2002 2004 2005 2007 2008 2009 2011 2012 2014 2015 2016 2018 Trade weighted index (£)

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Delay and confusion is costly

Information classification: Public 10

[Industries’ employment shares are shown in square brackets]

Source: Bank of England; Bloom et al (Fiscal Studies, Dec 2018)

Brexit generates uncertainty for businesses Investment has lagged broader economy

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EU migration has fallen

Information classification: Public 11

Source: ONS

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Long run economy impacts

UK Government analysis of Brexit scenarios

Information classification: Public 12

Source: UK Treasury

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Interest rates lower for longer

Information classification: Public 13

Source: Bank of England

1 2 3 4 5 6 2007 2009 2011 2013 2015 2017 2019 2021 2023 Bank Rate (%) Actual Past forecasts Feb 2019 forecast

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Poor productivity growth bedevils the UK economy

2010 2012 2014 2015 2016 2017 2018

80 85 90 95 100 105 110 115 120 125 2000 2005 2010 2015 2020 2025

Index (UK 2009 = 100)

Source: ONS, OBR

14 Information classification: Public