In Quarter 3 2019 the UK gross domestic product increased by 0.3% following a decline of 0.2% in the previous Quarter. Technically therefore the UK avoided a recession but the economy remains weak. Analysts had expected a rate of 0.4% in Q3, falling to 0.2% in Q4.
Business confidence is now at a seven year low point according to a survey at the Centre for Economics and Business Research. This results from a stagnated services sector in October and depressed manufacturing and construction sectors.
The CBI has found that factory orders have improved during November but from a very low base. The uncertainties of a “no deal” Brexit have lifted slightly but with a new Brexit deadline of 31 January the new Government after the General Election, of whatever colour, would have to hit the ground running, not the usual modus operandi of Government, particularly with a Christmas and New Year break in the offing.
On a brighter note the rate of inflation fell in October to 1.5%. It was suppressed by significant falls in energy prices after Ofgem lowered its price cap. Average wages are now rising at 3.6%, resulting in a bonus for wage earners. The pressure on the Bank of England to raise interest rates has eased.