Research
Tip: To personalise the research list, click the gear symbol above.


Choose type:


UK CommentDisappointing GDP number from the UK

  1. The lowest rate of expansion since 2012
  2. Businesses cut investment for a fourth consecutive quarter
  3. We continue to see 2019 growth of 1.3 percent
The lowest rate of expansion since 2012.
The 0.2% q-o-q rise in GDP in Q4 shows that the UK economy lost further momentum at the end of last year. As the drag on growth from Brexit uncertainty is only going to be bigger in Q1, there’s little hope of a rebound early this year. However, should a Brexit deal be concluded, there will be a lot of pent up activity released.
Businesses cut investment for a fourth consecutive quarter
The monthly fall for December was 0.4 percent, the biggest since March 2016. Inventories was one of the few things that came in higher than expected. This goes hand in hand with the worse than expected net exports as businesses are preparing for a hard Brexit by importing goods for stockpiling. There is a drag on growth as some businesses are forced to hold back on major investments and engage in cautionary stockpiling.
We continue to expect 2019 growth of 1.3 percent
The full year of 2018 came in at 1.4 percent growth, one-tenth higher than our forecast. We expect similar growth this year of 1.3 percent, close to the recently revised Bank of England forecast of 1.2 percent. These figures support the Bank of England’s more downbeat view, but keep in mind that if the uncertainty surrounding Brexit is removed, there is a good case for a bounce back.


Source: Macrobond

Disclaimer

Lars Henriksson

Strategist

Foreign Exchange

lahe06@handelsbanken.se

Latest analyses

2019-03-21

UK Comment

2019-03-21

UK Comment

2019-02-13

UK Comment