National income latest

UK GDP was estimated to have increased by 0.6% between Quarter 3 (July to September) and Quarter 4 (October to December), according to preliminary ONS estimates published on December 26th , 2017 (later revised up to 0.7%). This is now the 16th consecutive quarter of positive growth since Quarter 1, 2013. Growth in the consumer-focussed service sector made the most significant contribution to overall growth, along with strong performance in UK manufactures.

The figures provide clear evidence that the UK economy is proving resilient to any post-Brexit shock, although all economic forecasters are predicting a rise in the rate of inflation over the medium term.  In its latest inflation report the UK Treasury forecast inflation rising to 2.75% by 2018.

'Chained volume' measures adjust the value of GDP (or other economic indicators) on an annual basis by stripping out the affects of inflation to generate 'real' measures, where current measures are adjusted by the inflation rate of the previous year. This method, which uses chain linking, avoids the need to periodically adjust figures using a 'base year' method, and 'smoothes out' the data over time.

Previous Data

3rd quarter, 2016

UK GDP was estimated to have increased by 0.5% between Quarter 2 (April to June, 2016) and Quarter 3 (July to September), according to preliminary estimates published on October 27th, 2016 (later revised up to 0.6%). This is now the 15th consecutive quarter of positive growth since Quarter 1 2013. Growth in the service sector (up 0.8%) has more than compensated for falls in all the other key sectors of the economy.

The figure suggests that, while growth has slowed (down from 0.7% in the previous quarter), any negative impact of Brexit has yet to be felt across the whole economy.  The data released today is the first full quarter statistic since the June referendum.   A growing service sector more than made up for declines in manufacturing, construction and agriculture.  Reasonably buoyant retail sales combined with the effects of looser monetary policy appear to have stabilised the UK economy in the short term.

2nd quarter, 2016

GDP is estimated to have grown by 0.7% (revised up from 0.6% - 30/09/2016) in the second quarter of 2016, according to figures released by the ONS. This compares with growth of 0.4% in the first quarter (January to March).

Falls in the construction and agricultural sectors were more than compensated for by increases in the services and production sectors, with production increasing by 2.1% and services by 0.6%.

This means that, over the year, UK growth was very close to its long term trend rate, of 2.2%. Of course, any impact of Brexit on GDP will not be known for a few months – data for October is likely to provide a clear signal of any post-Brexit effect on the real economy.

4th quarter, 2015

The UK economy grew by 0.5% in the last quarter of 2015, according to preliminary estimates released this week using the output approach method of measurement. This compares with growth of 0.4% in the third quarter (July to Sept ember 2015).

Sectors experiencing the strongest growth were services (at 0.7%) and agriculture (at 0.6%). In contrast, industrial production and construction declined by 0.2% and 0.1% respectively. Comparing the last quarter of 2014 with the last quarter of 2015, GDP grew overall by 1.9%, and over the year GDP was up 2.2% - roughly the UK’s trend rate of growth. This means that the UK economy is now producing around 6.6% more than at the pre-recession peak of the first quarter of 2008.

2nd quarter estimates, 2015

UK GDP grew by 0.7% in the second quarter of 2015 (April to June) – up from 0.4% in the previous quarter, according to official estimates from the ONS. Over the previous year, GDP grew by 2.6%. Growth came largely from an increase in consumer spending on services. Output from agriculture and construction remained flat, but there was a small increase in industrial output. This is positive news for the UK Chancellor, George Osborne, although the much sought-after rebalancing, from consumption to investment and exports, remains elusive.  The strength of Sterling couple with a weak global economy are largely responsible for the lack of export growth.

Output increased by 0.8% in services and 1.3% in agriculture, but decreased by 1.8% in construction and 0.1% in production. GDP was 2.7% higher on the year.