KPMG comments on latest GDP data

Yael Selfin, Chief Economist at KPMG

Yael Selfin, Chief Economist at KPMG UK, comments on GDP data.

Yael Selfin, Chief Economist at KPMG UK, comments on today’s GDP data:

“After flat growth in August and September, GDP rose by 0.1% in October, thanks to a pick-up in services output, while output of both manufacturing and construction sectors declined. Wholesale and retail trade regained some momentum after a sharp fall in September, while transport and storage and hotels and restaurants also experienced a rebound during the month following two consecutive months of contraction.

“However, the latest weak PMI survey for services, which represent the bulk of the UK economy, does not augur well for the remaining months of the year, with uncertainties around Brexit putting business investment on hold and making households more cautious in their spending. Our expectations are therefore for the UK economy to end the year on a weaker note, with overall growth at only 1.3% in 2018.

“Trade data released today also shows a slightly worsening trade balance in October, with exports declining somewhat, and while exports to EU countries saw an increase, exports to non-EU countries dropped. With Brexit approaching, exports to the EU market are likely to be more under pressure, providing less of a boost to the economy. Our latest forecasts for the UK economy, which were published today in our December Economic Outlook report, see the UK economy growing by 1.6% in 2019 and by 1.5% in 2020.”