Wednesday January 18 2017
UK Unemployment Rate Steady At 11-Year Low Of 4.8%
ONS | Joana Taborda | joana.taborda@tradingeconomics.com

UK jobless rate remained at 4.8 percent in the three months to November of 2016, the same as in the previous period and in line with market expectations. The employment rate held at an all-time high of 74.5 percent and wages grew at a faster pace while the number of people in work fell by 9,000.

There were 1.60 million unemployed people, 52,000 fewer than for June to August 2016 and 81,000 fewer than for a year earlier. There were 883,000 unemployed men, 8,000 fewer than for June to August 2016 and 41,000 fewer than for a year earlier. There were 721,000 unemployed women, 44,000 fewer than for June to August 2016 and 40,000 fewer than for a year earlier.

31.80 million people in work, 9,000 less than in June to August 2016 but 294,000 more than for a year earlier. 23.25 million were working full-time, 209,000 more than for a year earlier. There were 8.55 million people working part-time, 86,000 more than for a year earlier.

The employment rate  was 74.5 percent, virtually unchanged compared with June to August 2016 but higher than for a year earlier (74 percent). 

There were 8.89 million people aged from 16 to 64 who were economically inactive, 85,000 more than for June to August 2016 but 63,000 fewer than for a year earlier. The inactivity rate was 21.7 percent, higher than for June to August 2016 (21.5 percent) but lower than for a year earlier (21.9 percent).

Average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.8% including bonuses and by 2.7% excluding bonuses compared with a year earlier.




Tuesday January 17 2017
UK Inflation Rate Highest Since 2014
ONS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the United Kingdom rose 1.6 percent year-on-year in December of 2016, higher than 1.2 percent in November and above market expectations of 1.4 percent. It is the highest inflation rate since July of 2014, boosted by rising cost of transport and housing and utilities amid a weaker pound.

Main upward pressure came from prices of transport (3.7 percent compared to 2.5 percent in November), housing and utilities (0.4 percent from 0.2 percent), recreation and culture (0.9 percent from 0.7 percent) and restaurants and hotels (2.8 percent from 2.6 percent). Prices of food and non-alocoholic beverages fell 1.1 percent, the least since August of 2014. 

On a monthly basis, consumer prices increased 0.5 percent, following a 0.2 percent gain in November and beating expectations of a 0.3 percent increase. It is the highest monthly inflation since February of 2014, boosted by transport prices (+2.9 percent), namely air fares (+49 percent). Food cost increased 0.8 percent and fuel prices fell less (-0.4 percent). 

The core index which excludes prices of energy, food, alcohol and tobacco advanced 1.6 percent on the year, above 1.4 percent in November and expectations of 1.4 percent. It is the highest reading since August of 2014.





Wednesday January 11 2017
UK Trade Deficit Widens Sharply As Imports Jump
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

The UK’s deficit on trade in goods and services widened by £2.6 billion to £4.2 billion in November 2016 from a downwardly revised £1.5 billion in the previous month. Exports rose by £0.7 billion to an all-time high of £47.3 billion while imports increased at a much faster £3.3 billion also to a record £51.5 billion , mainly boosted by higher purchases of machinery and transport equipment.

Total exports (goods and services) increased by £0.7 billion, or 1.5 percent, to £47.3 billion, boosted by a £0.7 billion, or 2.8 percent, increase in the export of goods. Total imports (goods and services) rose by £3.3 billion, or 6.9 percent, to £51.5 billion over the same period, reflecting a £3.0 billion, or 8.4 percent, gain in the import of goods. The deficit on trade in goods was £12.2 billion in November 2016, widening by £2.3 billion from October 2016. 

Exports of goods increased by £0.7 billion, or 2.8 percent, to £27.0 billion in November 2016, from £26.3 billion in October 2016. Rises in exports of finished manufactures, fuels and unspecified goods all contributed to the growth of exports. Within finished manufactures, exports of machinery and transport equipment rose by £0.4 billion, mainly attributed to increased exports of electrical machinery to EU countries; businesses reported an increase in exports of plugs and sockets to the Netherlands, Germany and France. Exports of fuels rose by £0.3 billion, attributed to an increase in the export of oil to EU countries, particularly to the Netherlands and France. 

Exports of unspecified goods (including non-monetary gold) to non-EU countries rose by £0.3 billion. In contrast to increases in other commodity groups, the exports of semi-manufactures fell by £0.3 billion. This was mainly due to a decrease in exports of material manufactures (such as non-ferrous metals, minerals and precious stones) to non-EU countries.

Imports of goods increased by £3.0 billion, or 8.4 percent, to £39.2 billion in November 2016, from £36.2 billion in October 2016. The largest contributions to the increase were from finished manufactures and semi-manufactures. Within finished manufactures, imports of transport equipment rose by £1.4 billion, following 2 consecutive months of falling import values. This is mainly due to increases in the imports of other transport equipment (ships, aircraft and railway equipment) and electrical machinery (from non-EU countries). The increase in electrical machinery is attributed to an increase in imports of portable data processing machines (for example laptops, tablets) from China.

Imports of semi-manufactures rose by £0.8 billion, which can be mainly attributed to an increase in the import of chemicals from EU countries (up £0.5 billion). Imports of miscellaneous manufactures (such as clothing and footwear, and scientific and photographic equipment) also contributed to the growth of imports in this commodity group.

Between the 3 months to August 2016 and the 3 months to November 2016, the total trade deficit (goods and services) narrowed by £0.4 billion to £11.0 billion. The narrowing of the deficit reflected a greater rise in exports (+2.9 percent) than the rise in imports (+2.4 percent).




Friday December 23 2016
UK GDP Annual Growth Revised Down To 2.2%
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

UK's gross domestic product expanded 2.2 percent year-on-year in the third quarter of 2016, accelerating from a downwardly revised 2 percent growth in the previous period but below the second estimate of a 2.3 percent gain. It was the strongest reading since the second quarter of 2015, mainly boosted by gross fixed capital formation.

On the expenditure side, gross fixed capital formation continued to grow (+0.5 percent from +0.4 percent in Q2), but business investment contracted (-2.2 percent). Meanwhile, growth slowed for both household consumption (+2.6 percent from +3 percent in Q2) and government spending (+0.2 percent from +0.7 percent).

Net external demand contributed negatively, as exports advanced 1.7 percent, following a 3.8 percent gain in Q2; while imports grew at a faster 4.2 percent, after rising by 3.4 percent the previous period. 

On the production side, the service industries expanded 3.1 percent (+2.7 percent in Q2), mainly boosted by distribution, hotels and restaurants (+5 percent from +4.6 percent in Q2), transport storage and communications (+4.2 percent from +2.1 percent in Q2); business services and finance (+3.1 percent from +2.8 percent in Q2); and government and other services (+1.6 percent from +1.4 percent in Q2). Industrial production rose at a slower 1.1 percent (+1.6 percent in Q2), as growth slowed for: manufacturing (+0.5 percent from +0.9 percent in Q2). Construction grew 1.7 percent, following a 1.6 percent gain in Q2.




Friday December 23 2016
UK Q3 GDP Growth Revised Up To 0.6%
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

The British economy advanced 0.6 percent on quarter in the three months to September of 2016, the same as in the previous period and better than the second estimate of 0.5 percent expansion. Household expenditure continued to grow while fixed investment rose at a slower pace and net external demand contributed negatively. Compared with the same period of 2015, the economy advanced 2.2 percent following a downwardly revised 2 percent expansion in the precedent quarter and missing the second estimate of 2.3 percent gain.

From the expenditure side, the largest positive contribution to GDP came from gross capital formation, which contributed a positive 1.3 percentage points, and household final consumption expenditure, which contributed a positive 0.5 percentage points, final figures showed. Net external demand subtracted 1.2 percentage points to growth.

Total domestic expenditure grew by 1.8 percent, after expanding by 0.3 percent in the previous period. Growth was recorded for: Household expenditure (+0.7 percent from +0.7 percent in Q2); and gross fixed capital formation (+0.9 percent from +1.1 percent), of which business investment (+0.6 percent). Meanwhile, government spending showed no growth (from -0.1 percent in Q2), non-profit institutions serving households’ consumption contracted 0.4 percent (from +1.7 percent in Q2) and the level of inventories increased by £1.6 billion, following an increase of £0.9 billion in the previous period. 

The trade balance deficit widened to £16.7 billion from £11.0 billion in Q2. Exports decreased by 2.6 percent, following a 1.4 percent rise in the previous period, while imports increased by 1.4 percent following a 0.4 percent gain. 

From the production side, the service industries increased by 1 percent following a 0.6 percent gain in Q2 and marking the 15th consecutive quarter of positive growth. Output rose for: Distribution, hotels and catering (+1.1 percent from +0.9 percent in Q2); transport, storage and communication (+2.6 percent from +0.4 percent); business services and finance (+0.8 percent, the same as in Q2); and government and other services (+0.4 percent from +0.1 percent). Industrial output decreased by 0.4 percent (+2.1 percent in Q2), as output declined for: manufacturing (-0.8 percent from +1.6 percent in Q2); electricity, gas, steam and air conditioning supply (-4.2 percent from +4.6 percent); and water supply and sewerage (-0.1 percent from +2.3 percent in Q2). By contrast, output from mining and quarrying (including oil and gas extraction) increased by 4.3 percent (+2.8 percent in Q2). Construction output decreased by 0.8 percent, following a 0.5 percent increase the previous period.

Compared to the same period of 2015, the economy expanded 2.2 percent, the biggest gain since the second quarter of 2015.




Thursday December 15 2016
UK Leaves Monetary Policy Unchanged
Bank of England | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of England Monetary Policy Committee voted unanimously to hold the Bank Rate at a record low of 0.25 percent and to leave the stock of purchased assets at £435 billion on December 15th, 2016, in order to meet the 2 percent inflation target, in a way that helps to sustain growth and employment. Policymakers reiterated that the path of monetary policy would depend on the evolution of the prospects for demand, supply, the exchange rate, and therefore inflation.

Since November, long-term interest rates have risen internationally, including in the United Kingdom. In part, this reflects expectations of looser fiscal policy in the United States which, if it materialises, will help to underpin the slightly greater momentum in the global economy evident in a range of data since the summer. At the same time, however, the global outlook has become more fragile, with risks in China, the euro area and some emerging markets, and an increase in policy uncertainty.

Domestically, data released since the Committee’s previous meeting continue to indicate that activity is growing at a moderate pace, supported by solid consumption growth.  Forward-looking components of business surveys are weaker than those regarding current output, however, suggesting that some slowing in activity is in prospect during 2017. The timing and extent of this slowing will depend crucially on the evolution of wages and how resilient household spending is to the pressure on real incomes from higher inflation.

Twelve-month CPI inflation stood at 1.2% in November, up from 0.9% in October and 1.0% in September. Looking forward, the MPC expects inflation to rise to the 2% target within six months. Since the Committee’s previous meeting, sterling’s trade-weighted exchange rate has appreciated by over 6%, while dollar oil prices have risen by 14%. All else equal, this would result in a slightly lower path for inflation than envisaged in the November Inflation Report, though it is still likely to overshoot the target later in 2017 and through 2018.

The MPC’s Remit requires that monetary policy should balance the speed with which inflation is returned to the target with the support for real activity. The lower level of sterling since the vote to leave the European Union has adversely affected that trade-off.  Sterling’s effect on CPI inflation will ultimately prove temporary and fully offsetting it would require exerting further downward pressure on domestic costs, including wages, and would therefore involve lost output and higher unemployment.  The Committee continues to judge that such outcomes would be undesirable and, consistent with its Remit, that it would therefore be appropriate to set policy so that inflation returns to its target over a longer period than the usual 18-24 months. 

Equally, there are limits to the extent to which above-target inflation can be tolerated.  Those limits depend, for example, on the cause of the inflation overshoot, the extent of second-round effects on domestic costs, the evolution of inflation expectations, and the scale of the shortfall in economic activity below potential.  Inflation expectations at medium-term horizons had been somewhat below their past average levels, reflecting the period of below-target inflation, although some measures have risen more recently.  The Committee continues to monitor the evolution of these expectations closely.

Earlier in the year, the Committee noted that the path of monetary policy following the referendum on EU membership would depend on the evolution of the prospects for demand, supply, the exchange rate, and therefore inflation. This remains the case. Monetary policy can respond, in either direction, to changes to the economic outlook as they unfold to ensure a sustainable return of inflation to the 2% target. 




Wednesday December 14 2016
UK Unemployment Rate At 11-Year Low Of 4.8%
ONS | Yekaterina Guchshina | yekaterina@tradingeconomics.com

UK jobless rate declined to 4.8 percent in the three months to October 2016 from 4.9 percent in the May to July period and 5.2 percent a year earlier. The figure came in line with market expectations and hit the lowest level since July to September 2005, as the number of unemployed went down while the number of people in work was little changed.

There were 1.62 million unemployed people (people not in work but seeking and available to work), 16,000 fewer than for May to July 2016 and 103,000 fewer than for a year earlier. There were 888,000 unemployed men, 13,000 fewer than for May to July 2016 and 53,000 fewer than for a year earlier. There were 728,000 unemployed women, little changed compared with May to July 2016 but 49,000 fewer than for a year earlier. The unemployment rate was 4.8 percent, down from 5.2 percent for a year earlier and the lowest since July to September 2005. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) that were unemployed.

There were 31.76 million people in work, little changed compared with May to July 2016 but 342,000 more than for a year earlier. There were 23.2 million people working full-time, 235,000 more than for a year earlier. There were 8.56 million people working part-time, 107,000 more than for a year earlier. The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.4 percent, slightly down from the joint record high of 74.5 percent recorded for May to July 2016 but higher than for a year earlier (73.9 percent).

There were 8.91 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 76,000 more than for May to July 2016 but 56,000 fewer than for a year earlier. The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.7 percent, down from 21.9 percent for a year earlier.

Average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.5 percent including bonuses and by 2.6 percent excluding bonuses compared with a year earlier.


Tuesday December 13 2016
UK Inflation Rate At More Than 2-Year High Of 1.2%
ONS | Yekaterina Guchshina | yekaterina@tradingeconomics.com

British consumer prices rose 1.2 percent in a year to November 2016, compared with a 0.9 percent growth in October and above market expectations of 1.1 percent gain. It was the highest inflation rate since October 2014, boosted by cost of clothing and footwear, recreation and culture and furnishings. The core index which excludes prices of energy, food, alcohol and tobacco advanced 1.4 percent on the year. On a monthly basis, consumer prices edged up 0.2 percent, in a line with market consensus.

Main upward pressure came from: clothing and footwear (+0.9 percent from -0.7 percent in October); furniture, household equipment and routine maintenance (+0.8 percent from +0.1 percent); recreation and culture (+0.7 percent from +0.2 percent); transportation (+2.5 percent from +2.3 percent).

Food and non-alcoholic beverages prices fell by a slower 2 percent (-2.4 percent in October) while housing and utilities rose less (+0.2 percent  from +0.3 percent in October)

On a monthly basis, consumer prices edged up 0.2 percent, following a 0.1 percent growth in October and in  a line with market expectations.

The core index which excludes prices of energy, food, alcohol and tobacco advanced 1.4 percent on the year, following 1.2 percent growth in the previous month. 


Friday December 09 2016
UK Trade Deficit Narrows Sharply As Exports Jump 4.6%
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

The trade deficit in the United Kingdom narrowed by £3.8 billion to £2.0 billion in September 2016 from an upwardly revised £5.8 billion in the previous month. It was the smallest trade gap since May this year, as exports increased by 4.6 percent, boosted by a 8.7 percent rise in the export of goods, while imports declined by 3.6 percent.

Between September 2016 and October 2016, total exports (goods and services) increased by £2.0 billion, or 4.6 percent, to £46.4 billion, boosted by a £2.1 billion, or 8.7 percent, increase in the export of goods. Total imports (goods and services) decreased by £1.8 billion, or 3.6 percent, to £48.4 billion over the same period, reflecting a £2.0 billion, or 5.2 percent, decrease in the import of goods.

The deficit on trade in goods was £9.7 billion in October 2016, narrowing by £4.1 billion from September 2016. Exports of machinery and transport equipment, and unspecified goods increased by £0.6 billion each, with material manufactures and chemicals increasing by £0.3 billion each.

Between September 2016 and October 2016, exports of goods to EU countries increased by £0.2 billion, or 1.5 percent, to £12.4 billion, mainly reflecting an increase in exports of miscellaneous manufactures (£0.2 billion) and material manufactures (£0.1 billion). These rises were offset by a decrease in fuels (£0.2 billion). Imports of goods from EU countries decreased by £0.3 billion to £20.5 billion in October 2016; there were decreases in imports of machinery and transport equipment of (£0.4 billion) offset by rises in imports of food, beverages and tobacco (£0.1 billion).

Between September 2016 and October 2016, exports of goods to countries outside the EU increased by £2.0 billion, reflecting a rise in unspecified goods (£0.6 billion), machinery and transport equipment (£0.5 billion), chemicals (£0.3 billion) and fuels (£0.2 billion). Imports of goods from countries outside the EU decreased by £1.7 billion, reflecting falls in imports of machinery and transport equipment (£1.1 billion), material manufactures (£0.4 billion) and miscellaneous manufactures (£0.3 billion). The deficit with non-EU countries in October 2016 was £1.6 billion.

Between the 3 months to July 2016 and the 3 months to October 2016, the total trade deficit (goods and services) widened by £4.7 billion to £13.2 billion. The trade position reflects exports minus imports; the widening of the deficit reflected a greater rise in imports (+ 5 percent) than the rise in exports (+1.8 percent). Both total trade exports and imports reached 3-monthly highs in the 3 months to October 2016 of £135.5 billion and £148.7 billion respectively.


Friday November 25 2016
UK GDP Annual Growth Confirmed at 1-Year High
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

UK's gross domestic product expanded 2.3 percent year-on-year in the third quarter of 2016, accelerating from a 2.1 percent growth in the previous period and in line with preliminary estimate. It was the strongest reading since the second quarter of 2015, boosted by net external demand and gross fixed capital formation.

On the expenditure side, net external demand contributed positively, as exports advanced 4.1 percent, following a 3.1 percent gain in Q2; while imports grew at a slower 2.6 percent, after rising by 4.7 percent the previous period. 

Gross fixed capital formation continued to grow (+1.2 percent from +1 percent in Q2), but business investment contracted (-1.6 percent from -0.8 percent in Q2). Meanwhile, growth slowed for both household consumption (+2.6 percent from +3 percent in Q2) and government spending (+0.8 percent from +1.1 percent).

On the production side, the service industries expanded 3 percent (+2.7 percent in Q2), mainly boosted by distribution, hotels and restaurants (+5.2 percent from +5 percent in Q2), transport storage and communications (+4.2 percent from +2.5 percent in Q2); and government and other services (+1.9 percent from +1.5 percent in Q2). Industrial production rose at a slower 1 percent (+1.6 percent in Q2), as growth slowed for: manufacturing (+0.5 percent from +1 percent in Q2). Construction edged up 0.1 percent, following a 0.4 percent gain in Q2.