Publication - Publication

State of the Economy: June 2018

Published: 29 Jun 2018
Directorate:
Chief Economist Directorate
Part of:
Economy
ISBN:
9781787810785

The State of the Economy report outlines recent developments in the global, UK and Scottish economies. You may need to select 'refresh' to see the graphics appear.

16 page PDF

1.7 MB

16 page PDF

1.7 MB

Contents
State of the Economy: June 2018
United Kingdom Summary

16 page PDF

1.7 MB

United Kingdom Summary

GDP growth slowed in Q1 2018.

  • UK GDP (second estimate) grew 0.1% in the first quarter of 2018, down from 0.4% growth in Q4 2017.

  • The Service sector grew 0.3% in Q1, with Business Services and Finance driving growth while output from Retail and Distribution, Hotels and Catering fell slightly.

  • The Production sector grew 0.6% in Q1 supported by 2.2% growth in Mining and Quarrying while Manufacturing growth slowed to 0.2%.

  • Construction sector output contracted 2.7% in Q1, the weakest quarterly construction growth since 2012

UK GDP Growth

Labour market performing strongly at start of 2018.

  • Latest data for Feb-Apr 2018 show that the employment rate has risen to 75.6%.

  • The unemployment rate has fallen over the recent quarter and year to 4.2%.

  • The inactivity rate has fallen over the recent quarter and year to 21.0%.

  • Nominal earnings growth (regular pay) eased to 2.8% while real wages grew 0.4% over the year to Feb-Apr 2018.

  • Labour productivity growth rebounded in the second half of 2017, growing 0.7% in Q4 and 0.6% over the year.

UK Labour Market

Inflation on a downward trend in 2018.

  • CPI inflation in May was unchanged from April’s rate of 2.4%. The rate of inflation has slowed from 3.0% in January, as the effects of Sterling’s past depreciation fade.

  • The recent fall in inflation and softer output performance have led the MPC to keep the Bank Rate unchanged at 0.5% since November 2017.

UK Labour Market

UK growth forecasts soften for 2018.

  • Growth is forecast to slow in 2018 with the Bank of England forecasting growth of 1.4%, accelerating to 1.7% in 2019.

  • The slower growth outlook reflects temporary weather related headwinds at the start of 2018 alongside underlying heightened uncertainty and weak productivity growth.

 

UK CPI Inflation & Interest Rate


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