the saturday economist uk economic outlook march 2016

The Saturday Economist

UK Economic Outlook March 2016 Page �1

The Saturday Economist UK Economic Outlook Q1 2016 (March Edition)

The Saturday Economist .com



Growth in 2015 was 2.2% down from 2.9% in 2014. We expect growth of 2.6% in 2016 …

In this March economics update we forecast world growth of 3.2% in 2016 up from 3.1% in 2015. UK Inflation will average just 0.3%, CPI basis, over the balance of the year 2016. Unemployment will continue to fall, government borrowing will also fall. The service sector will lead the recovery as manufacturing and construction output also rise.

We are forecasting a modest increase in manufacturing of around 0.9% in 2016 with a 0.5% increase in construction activity based on the 2015 data. The trade figures will continue to disappoint, offset by a further £2 billion oil dividend, despite a moderate oil price recovery. The challenge to the current account following the drop in overseas investment income continues and will present a significant problem to the outlook for sterling over the medium term.

In the UK we expect the economy to grow by 2.6% in 2016 following growth of 2.2% last year. In the US the recovery continues with growth of 2.4% expected in the year ahead.

The inflation outlook is still muted, with the fall in world oil, energy, food and commodity prices continuing to dominate headline inflation.

The UK economy grew by 1.9% in the final quarter, revisions to construction and manufacturing growth pulling total output lower. The service sector continues to drive growth.

We expect base rates to rise in 2016 Q2 …

UK GDP growth %

-5.0

-3.2

-1.4

0.4

2.2

4.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2.52.62.2

2.92.2

1.2

2.01.5

-4.2-0.5

2.62.73.0


Contents Chapter 1 The World Economy page 4

Chapter 2 World Trade and Oil Prices page 6

Chapter 3 UK Economics Growth in UK GDP (O) Output page 7

Chapter 4 UK Economics Growth in UK GDP (E) Expenditure chained page 9

Chapter 5 UK Economics Growth - Investment - mind the gap? page 11

Chapter 6 UK trade in goods and services page 13

Chapter 7 Labour market trends page 14

Chapter 8 Government Borrowing page 15

Chapter 9 Inflation Outlook page 16

Chapter 10 Interest Rates - base rates and gilt yields page 17

Appendices page 18



Chapter 1 World Economy


Chart 1.1 : World GDP growth %

-1.00.01.02.03.04.05.06.0

2005 2007 2009 2011 2013 2015 2017

• The world economy is expected to have grown by 3.1% in 2015. We forecast growth of 3.2% in 2016 and 3.4% in 2017.

• Recovery in the USA and UK, will continue. We expect growth of 2.4% in US in 2015 and 2.6% in 2016.

• Slower growth is expected in the oil producing economies of OPEC, Russia and Venezuela. We expect the Rouble economy to shrink by -0.5% in 2016 following a fall of -4.0% in 2015.

• On a regional basis, growth in Sub Saharan Africa and the Asia Pacific region will continue at around 4.5%.

• Recovery in North America is expected to accelerate as US growth impacts on Mexico. In Canada, growth will moderate slightly as oil prices continue to hit oil output.

• In South America, we expect zero growth in 2016. Negative growth in Brazil (-2.7%) and Venezuela (-5.2%) will impact on the region.

• In Eastern Europe problems in Russia and the Ukraine, will weigh on the growth prospects for the region. Growth of just 1.5% is expected this year, rising to 2.0% in 2016.

• Growth in Western Europe will improve led by a recovery in Germany. We expect growth of 1.7% in 2015 and 1.9% in 2016.

• In the Eurozone, we expect growth of 1.6% up from 1.5% in 2015. We do not expect much from any additional QE expansion.

• World trade is expected to grow by 3.2% in 2016 and 3.5% in 2017.

• World prices for energy, particularly oil, primary metals, food and manufactures will remain subdued in the first half of the year.

• We expect oil prices to rally to $65 per barrel Brent Crude basis by the final quarter of 2016 cf a forecast average - $40 in Q1 2016.

• Overall the recovery in the world economy will continue, with limited acceleration in price levels through this year.

Chart 1.2: World Trade growth %

-16.0-12.0-8.0-4.00.04.08.0

12.016.0

2005 2007 2009 2011 2013 2015 … the recovery continues.


The estimates are produced with heavy reliance on world trade forecasts from the European Union, the IMF, the OECD, the World Bank and the NIESR world model. Additional data is derived from the USA Bureau of Economic Affairs. World trade data is developed from the CPB World Trade Monitor, produced by the CPB Netherlands Bureau for Economic Policy Analysis. We also utilise the Consensus Economics data : Consensus Forecasts, Asia Pacific, Latin America and Eastern Europe. The Top Ten economies in the world account for approximately two thirds of global GDP.

Table 1 World Economy GDP Growth %Top Ten Markets

2010 2011 2012 2013 2014 2015 2016 2017

United States 2.5 1.8 2.8 2.2 2.4 2.2 2.4 2.4

China 10.4 9.4 7.7 7.6 7.3 6.9 6.7 6.4

Japan 4.7 -0.4 1.4 1.6 -0.1 0.6 1.0 1.2

Germany 4.0 3.3 0.7 0.4 1.6 1.7 1.7 1.8

France 1.6 2.0 0.0 0.3 0.2 1.1 1.4 1.5

Brazil 7.5 2.7 1.0 2.5 0.1 -3.6 -2.7 0.9

UK 1.5 2.0 1.2 2.2 2.9 2.2 2.5 2.6

Italy 1.7 0.6 -2.4 -1.8 -0.4 0.7 1.3 1.5

Russia 4.5 4.3 3.4 1.3 0.6 -3.8 -0.5 1.5

India 7.5 6.7 4.5 4.7 7.3 7.4 7.7 7.7

World GDP 4.5 3.4 3.2 3.3 3.4 3.1 3.2 3.4

World Trade % 14.6 6.0 2.1 2.8 3.2 2.5 3.2 3.5



Chapter 2 World Trade and Oil Prices …

… no worries about inflation.


Chart 2.3 :World Commodity Prices

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

2005 2007 2009 2011 2013 2015 2017

Chart 2.1 : Oil Prices $ per barrel

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2005 2007 2009 2011 2013 2015

• Oil price Brent Crude basis averaged $54 per barrel in 2015, down from $99 prior year. The average price in Q4 2015 was $43.74.

• We expect oil prices to average $35 in the first quarter of 2016 rising to $65 (Brent Crude basis) by the end of the year 2016.

• World trade prices fell by -2.1% in 2014 and by an estimated -12.4% in 2015.

• We expect world trade prices to remain under pressure falling by a further -6% in 2016 recovering to 0.5% growth in 2017.

• We believe basic metal prices including, copper, zinc, lead, aluminium and iron have reached a basic floor level which will lead to a moderate recovery in 2016.

• Precious metals, gold, silver and platinum have demonstrated consolidation. Gold averaged $1100 in the final quarter 2015 rising to around $1200 in the first quarter of 2016.

• World commodity prices, excluding fuel (chart 2.3) have been extremely volatile increasing by over 25% in 2006 and 2010.

• In 2014, commodity prices fell by 4.3% with a further fall of 20.1% 2015. We expect prices to fall further in 2016 with a strong rally in 2017.

• Trends in world trade, world trade prices and commodity prices continue to support a modest world recovery.

Chart 2.2 : World Trade Prices

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

2005 2007 2009 2011 2013 2015 2017


Chapter 3 Growth in UK GDP (O) Output


• We model UK GDP growth in the first instance using our pragmatic GDP (O) model. On this basis we employ more conventional business modelling techniques including, ARIMA, exponential smoothing, pattern recognition and econometrics.

• Following growth of 2.9% in 2014 the economy GDP(O) expanded by 2.2% in 2015 slowing to 1.9% in the final quarter.

• The service sector will continue to underpin growth in the economy. Following growth of 2.5% in 2015, we expect service sector growth of 3.1% in 2016 and 3.0% in 2017.

• Construction output, driven by developments in housing and infrastructure increased by 3.4% in 2015. We expect growth of 0.5% in 2016 rising to 3.5% in 2017.

• Manufacturing output remains 7.6% below the peaks registered in 2008 prior to recession.

• Following an increase in manufacturing output of 2.7% in 2014, output fell by -0.2% in 2015. We expect growth of just 0.9% in 2016 rising to 1.2% in 2017.

• Within the service sector, the leisure sector is expected to show strong growth along with a strong performance in business services, transport and finance.

• Overall, the UK will experience strong growth in output over the next two years. [We estimate the long term trend rate of growth to be 2.6% following latest data revisions. We do not share concerns about UK productivity.]

• The service sector will continue to underpin growth in the UK assisted by developments in manufacturing and construction.

• The increase in housing building activity is expected to continue into 2016.

Chart 3.1 : UK GDP growth %

-5.0

-3.2

-1.4

0.4

2.2

4.0

2005 2007 2009 2011 2013 2015 2017

Chart 3.2 : Service Sector %

-3.0

-1.6

-0.2

1.2

2.6

4.0

2005 2007 2009 2011 2013 2015 2017

… our overall forecast for growth in 2016 is 2.6%.


Full details and charts of the GDP(O) forecasts are available in the appendix data. Revisions since the last forecast relate to construction and manufacturing.The forecast is consistent with the Second Estimate of GDP Q4 2015 released by the ONS on the 25th February 2016.

Table 3 UK GDP (O) Growth %Key Sectors 2010 2011 2012 2013 2014 2015 2016

Agriculture … -0.7 10.9 -7.3 0.7 14.3 0.6 1.7

Extractives -2.4 -14.2 -11.0 -3.3 -0.5 6.6 2.0

Manufacturing 4.2 2.2 -1.4 -1.1 2.7 -0.2 0.9

Electricity, Gas 4.0 -6.1 -0.9 0.4 -5.8 0.3 -2.0

Water, Sewage -1.3 5.7 -0.1 4.3 0.8 3.1 1.8

Total Production 2.9 -0.6 -2.7 -0.8 1.3 1.0 0.9

Construction 8.3 2.2 -7.6 1.6 7.5 3.4 0.5

Service Sector

Leisure 1.0 1.9 1.7 4.1 4.7 4.8 4.9

Transport 3.0 1.8 1.9 2.2 3.0 4.2 3.9

Business et al 0.4 3.3 3.5 3.6 3.9 2.5 3.4

Education, Hth 0.3 1.1 1.8 1.4 1.4 0.7 1.4

Total Services 1.0 2.2 2.5 2.8 3.2 2.6 2.9

Total GDP (O) 1.5 2.0 1.2 2.2 2.9 2.2 2.6



Chapter 4 Growth in UK GDP (E) - Expenditure chained measure


• We continue to offer little hope for the rebalancing agenda in our forecasts for growth in expenditure.

• Household expenditure increased by 3.0% in 2015. We expect growth of 3.0% in 2016 and 2.9% in 2017.

• Government expenditure increased by 1.7% in 2015. Government expenditure is expected to increase by 2.0% in 2016, slowing to 1.9% in 2017.

• Investment increased by 4.2% in 2015. We expect growth of 4.1% in 2016 and 4.0% in 2017.

• Domestic expenditure increased by 3.2% in 2014 and by 2.7% in 2015. We expect growth of 2.5% in 2016 and 2.5% in 2017

• Net trade will continue to have a negative impact on growth, with exports increasing at a slightly slower rate than imports.

• We expect exports to increase by 4.5% in 2016 and 2017 following growth of 5.0% in 2015.

• Imports increased by 6.2% in 2015. We expect growth of 5.0% in 2016 and 4.8% in the following year.

• Our GDP Expenditure model is consistent and balanced with the ONS data. We forecast GDP(E) growth of 2.6% in 2016 and 2.5% in 2017.

• The trade deficit will continue to be have a negative impact on UK GDP but of itself will not be a constraint to growth.

• We continue to caution on the overall current account deficit. We estimate in the final quarter of 2016 the deficit averaged 3.8% of GDP.

• This compares with an average 5% current account deficit in 2015.

Chart 4.1 : Households %

-4.0

-2.4

-0.8

0.8

2.4

4.0

2005 2007 2009 2011 2013 2015 2017

Chart 4.2 : Investment %

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

2005 2007 2009 2011 2013 2015 2017

… our investment outlook is revised slightly.


Table 4 UK GDP (E) Expenditure Chained Measure %Expenditure 2010 2011 2012 2013 2014 2015 2016

Households 0.5 -0.1 2.0 1.9 2.6 3.0 3.0

NPIs -1.4 3.7 -1.1 1.1 0.9 0.9 1.6

Government 0.0 0.1 1.8 0.5 2.5 1.7 2.0

Investment 5.9 2.0 1.5 2.6 7.3 4.2 4.1

Inventories - - - - - - -

Domestic Exp 2.7 0.5 2.2 2.7 3.2 2.7 2.5

Total Exports 6.2 5.8 0.7 1.2 1.2 5.0 4.5

Gross Final Exp 3.4 1.6 1.8 2.3 2.7 3.2 3.0

Total Imports 8.7 0.6 2.9 2.8 2.4 6.2 5.0

GDP 1.9 2.0 2.9 2.2 2.9 2.2 2.6


Chart 4.4 : Exports %

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

2010 2011 2012 2013 2014 2015 2016

Chart 4.5 : Imports %

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

2010 2011 2012 2013 2014 2015 2016

Chart 4.3 : Domestic Expenditure %

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

2010 2011 2012 2013 2014 2015 2016


Chapter 5 UK Economics Growth - Investment …


• Investment grew by 7.3% in 2014 and by 4.2% in 2015. We forecast growth of 4.1% in 2016 and 4.0% in 2017.

• Business Investment increased by 4.7% in 2014 and by 4.8% in 2015. We expect growth of 7.1% in 2016 slowing to 4.5% in the following year.

• Investment in plant and machinery increased by 9.2% in 2015. We are forecasting an increase of 7.3% in 2016 and 6.5% in 2016.

• Our four year capital stock model suggests growth of 3.8% in 2015 and 2.9% in 2016 after growth of 3.6% in 2014.

• By the beginning of 2015, capital stock levels were be above the pre recession highs of 2007-8. The Fixed Asset Turnover Ratio will average 6.8 in the current year and 6.8 in 2016 compared to 6.7 in 2010.

Chart 5.1 Total Investment £m

50,000

60,000

70,000

80,000

90,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Chart 5.3 Machinery & Equipment £m

10,000

12,000

14,000

16,000

18,000

20,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Chart 5.2 Business Investment £m

20,000

30,000

40,000

50,000

60,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Chart 5.4 Four Year Capital Stock £m

150,000

187,500

225,000

262,500

300,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



Chapter 6 - UK trade in goods and services

… heading in the wrong direction.


Chapter 6 UK Trade in goods and services


Chart 6.1 : Trade in Goods

-150.0

-125.0

-100.0

-75.0

-50.0

-25.0

0.0

2005 2007 2009 2011 2013 2015 2017

Chart 6.2 : Trade in Services

0.0

20.0

40.0

60.0

80.0

100.0

2005 2007 2009 2011 2013 2015

Chart 6.3 : Trade in Goods & Services

-50.0

-41.7

-33.3

-25.0

-16.7

-8.3

0.0

2005 2007 2009 2011 2013 2015

Balance Trade in Goods and Services £ billion

• We model exports as a function of world trade and relative prices. A model in which we find the demand terms dominant.

• We model imports as a function of domestic demand, or total final expenditure and a relative price term. Here the demand term is dominant with relative price inelasticity. There is little or no substitution effect.

• The trade in goods deficit increased to £123.7 billion in 2014 and £125 billion in 2015.

• We expect the deficit to increase to £128.5 billion in 2016 and £130.5 billion in 2017.

• The trade in services surplus was £89.1 billion in 2014, an increase of 10% on the prior year level.

• The trade in services surplus slowed to £88.7 billion in 2015. We forecast a surplus of £92.9 billion in 2016 and £95.0 billion in 2017.

• The surplus in services will continue to offset the structural trade deficit in goods.

• The trade in goods and services deficit increased to £36.3 billion in 2015 compared to £34.5 billion in the prior year.

• Our central forecast is for the overall deficit to moderate to £35.8 billion in 2016 rising to £35.9 billion in 2017.

• The ongoing deficit, measured at less than 2% of GDP will not of itself, create a problem for sterling.

… the trade deficit will continue to disappoint.


Chapter 7 Labour Market Trends


Chart 7.1 : Claimant Count 000

0

500

1,000

1,500

2,000

2005 2007 2009 2011 2013 2015 2017

Chart 7.2 : LFS Count 000

1,000

1,500

2,000

2,500

3,000

2005 2007 2009 2011 2013 2015 2017

Chart 7.3 : LFS Rate %

0.0

2.0

4.0

6.0

8.0

10.0

2005 2007 2009 2011 2013 2015 2017• The claimant count has fallen significantly

over the last twelve months as the economy continued to grow by 2.2% in 2015.

• The reduction was 245,000 comparing the average 2015 with 2014.

• Over the last twelve months to January 2016, the claimant count has fallen by 85,400 to a level of 760,200.

• We forecast a further fall in the claimant count rate from an average 793,00 in 2014 to 706,000 by the end of 2016 and a rate of 2.1%.

• The LFS count unemployment in the third quarter of 2015 is estimated to be 1.69 million.

• This is a reduction of over 172,000 over the previous twelve months.

• We expect levels to fall to 1.625 million by the final quarter of 2016 and 1.57 million by the final quarter of 2017.

• We expect the unemployment rate (LFS basis) to fall from 5.1% at the end of 2015 to 4.9% by the end of 2016 and 4.7% by the end of 2017.

• The unemployment rate averaged 5.4% in 2015. We expect the rate to fall to 4.9% in 2016 and 4.7% in 2017.

• The average rate, in the pre recession period was just 5.5%.

• Our models suggests “spare capacity” will have been exhausted by the final quarter of 2015 (LFS basis).

• The claimant count data however, suggests the average unemployment rate of 3% in the period 2005 - 2008 has already been achieved. This will place additional pressure on the pay round and earnings into 2015.


Chapter 8 Government Borrowing

£ Billion 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Borrowing 154.7 136.8 115.9 121.1 103.0 91.9 80.1 55.0 28.5 4.6 -10.1

Debt 1,004.3 1,149.9 1,242.6 1,352.7 1,459.0 1,546.8 1,599 1,662 1,689 1,702 1,700.1


Chart 8.1 : Borrowing £ billion

020406080

100120140160

2009/10 2012/13 2015/16 2018/19

• Government borrowing in the twelve months to March 2015 is estimated to be £91.9 billion compared to £103.0 billion prior year.

• Following the release of the January 2016 data, the government is off track to meet the OBR target of £73.5 in financial year 2015/6.

• We expect total borrowing in the financial year 2015/16 to be £80 billion falling to £55.0 in 2016/17.

• Total debt, is forecast to be just over £1.600 trillion at the end of the current financial year.

• Rising to £1.662 trillion at the end of 2016/17…

• peaking at £1.700 trillion at the end of the current forecast cycle 2019/20.

• NB The borrowing figures includes Housing Association Data from 2014 onwards

• As a % of GDP debt is estimated to be 83.1% at the end of 2014/15

• Falling to 82.5% in 2015/16, 81.7% in 2016/17 and 77.9% in 2017/18.

• Information derived from OBR Economic and Fiscal Outlook November 2015. ONS data : Public Sector Finances January 2016 released on 19th February 2016.

Chart 8.2 : Total Debt £ billion

700

900

1,100

1,300

1,500

1,700

2009/10 2012/13 2015/16 2018/19

Chart 8.3 : Total Debt % GDP

40

50

60

70

80

90

2009/10 2012/13 2015/16 2018/19


Chapter 9 Inflation Outlook


Chart 9.1 : CPI Inflation

0.0

1.0

2.0

3.0

4.0

5.0

2005 2007 2009 2011 2013 2015 2017

Chart 9.2 : Manufacturing Prices (O)

0.01.02.03.04.05.06.07.08.0

2005 2007 2009 2011 2013 2015 2017

Chart 9.3 : Manufacturing Prices (I)

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

2005 2007 2009 2011 2013 2015 2017

Chart 9.4 : Earnings

0.0

1.0

2.0

3.0

4.0

5.0

2005 2007 2009 2011 2013 2015 2017

Chart 9.5 : Money Supply Narrow

0.0

2.0

4.0

6.0

8.0

10.0

2005 2007 2009 2011 2013 2015 2017

Chart 9.6 : Money Supply M4

-5.0

0.0

5.0

10.0

15.0

2005 2007 2009 2011 2013 2015 2017

CPI inflation average 0.0% in 2015 rising to 1.1% in 2016 and 2% in 2017

Manufacturing prices - 0.0% in 2014, falling by -1.7% in 2015 then up 1.5%.

Input prices down -6.6% 2014, -12.5% in 2015. We expect -5.0% 2016.

Earnings averaged 1.3% in 2014 rising to 2.5% in 2015. We expect a rise to 3.2% in 2016 and 3.5% in 2017.

Narrow money growth, notes and coins increased by 4.3% in 2014 and 6.0%. We expect growth of 5.5% in 2016 slowing to 5.2% in 2017.

Broad increased by 4.4% in 2014, slowing to a rate of 3.8% in 2015. We expect growth of 4.2% in 2016 rising to 4.5% in 2017.


Chapter 10 Interest rates - base rates and gilt yields

Table 10 - Base rates and Gilt Yields

2013 2014 2015 2016 2017

Base 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.50 0.50 0.50 0.50 0.50 0.75 1.00 1.25 1.25 1.50 1.75

Gilts 2.2 2.0 2.8 2.8 2.9 2.8 2.6 2.1 1.7 2.0 2.0 1.9 2.0 2.2 2.5 2.75 3.0 3.0 3.25 3.25


We expect UK base rates to remain on hold in the first half of 2016 thereafter rising to 0.75% in the third quarter of 2016 and to 1.75% by the end of 2017.

Gilt yields have rallied from the sub 2% lows in 2015. We expect yields to return towards fair value 4.5% at some stage. We expect rates to rally to 3.25% by the end of 2017.

Chart 10.2 10 year Gilt Rates

0.00

1.00

2.00

3.00

4.00

5.00

2013 2014 2015 2016 2017

Chart 10.1 UK Base Rates

0.00

0.50

1.00

1.50

2.00

2.50

2013 2014 2015 2016 2017

HIgher event Base Case


Appendix 1 Gross domestic product : expenditure at current market prices : ONS C1



Appendix 2 Gross domestic product : chained volume measure : ONS C2



Appendix 3 Gross domestic product : chained volume measure : ONS B1



Appendix 4 Exchange Rates, Interest Rates, Inflation and Labour Market Data



Appendix 5 Economic Forecast OverviewOutturn

2010Outturn

2011Outturn

2012Outturn

2013 Outturn

2014Outturn

2015Forecast

2016

GDP Real Growth % 1.6 2.0 2.9 2.2 2.9 2.2 2.6

GDP Levels (2011 = 100) 97.1 99.0 100.0 102.2 105.0 107.4 110.2

GDP(E) at market prices £Bill 1,558.4 1,619.5 1,655.2 1,734.9 1,817.2 1,864.0 1,941.1

Household Consumption 0.5 -0.1 2.0 1.9 2.6 3.0 3.0

Business Investment 5.9 2.0 1.5 2.6 7.3 4.2 4.21

Government Consumption 0.0 0.1 1.8 0.5 2.5 1.7 2.0

Domestic Expenditure 2.7 0.5 2.3 2.6 3.2 2.7 2.5

Exports 6.2 5.8 0.7 1.2 1.2 5.0 4.5

Imports 8.7 0.6 2.9 2.8 2.4 6.2 5.0

Net Trade % GDP current -2.4 -1.6 -2.0 -2.0 -1.9 -1.7 -1.8

Inflation

CPI 3.3 4.5 2.9 2.6 1.5 0.1 1.1

Labour Market

Employment Millions 29.0 29.2 29.5 29.9 30.7 31.2 31.6

Average Earnings 2.4 2.4 1.4 1.5 1.3 2.5 3.2

LFS unemployment rate 7.9 8.1 7.9 7.6 6.2 5.4 4.9

Claimant Count Millions 1.50 1.53 1.59 1.42 1.04 0.80 0.74


The forecast is broadly consistent with the Second Estimate of GDP Q4 2015 released by the ONS on the 25th February 2016.



About the Author

John Ashcroft is founder and publisher of the Saturday Economist. He is Chief Executive of pro.manchester, a member of the AGMA Business Leadership Council and a visiting professor at Manchester Metropolitan University Business School.

Educated at the London School of Economics, with a PhD in economics, his specialist subjects include economics, strategy and social media. Economics specialisms include the UK balance of payments, international trade, interest rates and exchange rates modelling.

John Ashcroft (PhD) BSc.(Econ) FRSA, CBIM

Check out the web site, the Saturday Economist . com and sign up for FREE weekly updates. Now mailing to over 50,000 business every week

John Ashcroft and Company experience worth sharing. Join me on Twitter @jkaonline and LinkedIn John Ashcroft and Facebook.The Saturday Economist

Where economics means business and analysis makes sense …



The Saturday Economist UK Economic Outlook Q1 2016 (March Edition)

The Saturday Economist .com