March 2019 GDP Tracker

The UK economic growth continues at slow pace and is expected to grow by 0.2% in the first quarter of 2019, the same pace as in the fourth quarter of last year.

Main points

• The UK economy is on course to grow by 0.2% in the first quarter of 2019, the same pace as in the fourth quarter of last year (figure 1).
• According to new ONS statistics published this morning, the UK economy expanded by 0.2 per cent in the three months to January.  This outturn was in line with the 0.2 per cent growth rate that we forecast last month for the same period.  Survey evidence suggests that growth is likely to be marginally positive in February and March.
• There was a general improvement across all major sectors in January, with the most significant contribution coming from the service sector, which is estimated to have recovered the ground lost in December.  Economic growth in the first quarter is expected to be mainly driven by the service sector, with small positive contributions expected from the production and construction sectors (figure 3).

Garry Young, Head of Macroeconomic Modelling and Forecasting, said “The latest ONS data come as something of a relief, after several successive months of downside news and some recent pessimistic commentary. Nevertheless, the pace of UK economic growth remains lacklustre, reflecting the impact of Brexit -related uncertainty and similarly weak growth in the global economy outside of the United States.  The near-term outlook for the UK economy depends very much on the outcome of the Brexit negotiations that are being discussed in Parliament today, and the extent of any fiscal response promised in the Spring Statement tomorrow”.

Please find the full commentary in attachment.