February 2019 GDP Tracker

Latest economic data confirms that the UK economy lost momentum in the final quarter of 2018, with quarterly growth of 0.2%.  GDP growth is set remain weak in the first quarter of this year. 

Main points

• Latest economic data confirms that the UK economy lost momentum in the final quarter of 2018, with quarterly growth of 0.2%.  GDP growth is set to remain weak in the first quarter of this year.

• According to new ONS statistics published this morning, the UK economy expanded by 0.2 per cent in the final quarter of last year after growing by 0.6 per cent in the third quarter (three months to September). The outturn was slightly lower than the 0.3 per cent GDP forecast that we published last month for the same period, and reflected weaker output in December than we had expected. Building on the official data, our monthly GDP Tracker suggests that the economy will also expand by just 0.2 per cent in the first quarter of this year.  

• All major sectors showed a fall in output in December and, while single month figures can be volatile, the widespread weakness in output is a concern going into 2019.

Garry Young, Head of macroeconomic forecasting and modelling, said “The UK economy weakened sharply at the end of 2018, with falls in output in all of the major sectors in December. While single month figures can be volatile, the widespread weakness in official output data and many business surveys does not augur well for economic performance in the United Kingdom in 2019.  Further downside economic news, including a costly exit from the EU, would strengthen the case for a more active policy response”.

Please find the full commentary in attachment.