United Kingdom Summary
GDP growth was flat in Q4 2019.
- UK GDP growth was flat (0.0%) in Q4 2019, slowing from 0.5% growth in the third quarter.
- In 2019 as a whole, GDP grew 1.4%, slightly up from 1.3% in 2018.
- In Q4 2019, Services growth (0.1%) and Construction growth (0.5%) was offset by a contraction in Production output (- 0.8%).
- GDP and business survey data suggest that there was stockpiling ahead of the October Brexit deadline, but to a lesser extent than for the March deadline.
Labour market remains strong in Sep-Nov 2019.
- The UK employment rate rose over the year to 76.3%, its highest on record, with 32.9 million people in employment.
- UK unemployment remained at 3.8%, its lowest rate since 1974.
- The inactivity rate fell over the quarter and year to 20.6%.
- GB regular pay continued to strengthen into the second half of 2019 growing 1.8% over the year to November.
- Labour productivity grew by 0.1% over the year to Q3 2019.
- Inflation fell notably in the second half of 2019.
- CPI inflation fell to 1.3% in December 2019, having risen to 2.1% in July.
- Decreasing inflation in 2019 was largely driven by a falling contribution from energy prices.
- The Bank of England forecast inflation to remain below target in the short term before returning toward 2.0% in 2022.
GDP growth is forecast to pick up slightly in 2020.
- The BoE forecast GDP to pick up in the short term reflecting an easing in uncertainty and strengthening business activity and investment intentions.
- Longer term, the labour market is expected to remain tight, while weak productivity growth and transition to a new UKEU trade relationship is forecast to weigh on output growth.