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Economic Review – September 2018

Posted on 09 October, 2018

GROWTH PICKS UP BUT BREXIT FEARS LOOM LARGE

Although the UK economy recently recorded its fastest rate of growth in almost a year, Brexit-related uncertainties continue to cast a shadow over future growth prospects. Data released by the Office for National Statistics (ONS) shows that gross domestic product rose by 0.6% during the May–July period boosted by an increase in consumer spending thanks to the unusually hot weather and England’s strong World Cup performance. This was the highest growth rate since August 2017 and marks a distinct pickup compared to the 0.4% figure posted in the three months to June……

RETAIL SALES RISE STRONGLY

The latest retail sales figures proved to be much stronger than analysts had been expecting as UK consumers continued their summer spending spree. Official data published by ONS showed that retail sales volumes increased by 0.3% between July and August. In comparison, the consensus market forecast had predicted a 0.2% drop in sales during that period. Across the three months to August as a whole, which smooth out monthly volatility in the data, the growth in sales was 2.0%. This was down from 2.4% in the three months to July, but still represents solid growth in sales volumes……

WAGE GROWTH PICKS UP OVER SUMMER MONTHS

The latest set of employment statistics showed that the UK labour market remains in a particularly robust state and also revealed a recent pick-up in pay growth. According to data from the Labour Force Survey the number of people unemployed stood at 1.36 million in the three months to July, 55,000 fewer than in the previous three-month period. This left the unemployment rate at 4.0%, its lowest level for over 40 years. And, while the number of people in work during the three months to July remained unchanged at 32.4 million, this still represents a historically high level……

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