Quarterly highlights:
The UK economy weathered the pandemic better than previously thought, but momentum has been weak since
GDP fell 0.5% m/m in July as industrial action and poor weather weighed on activity. While growth has been relatively weak over 2023, ONS data revisions show the UK had a more robust recovery from the pandemic, comparable to the rest of the G7.
CPI inflation has fallen back over the summer, but domestic price pressures remain a concern
Rising interest rates were accompanied by a fall in headline inflation, down to 6.7% in August but still well above the Bank of England’s 2% target. Strength in the core and services measures suggest price pressures will unwind slowly.
Wage growth in the private sector has so far defied rising unemployment and cooling labour demand
Employment and vacancies fell in Q3, suggesting firms’ hiring intentions have weakened. Even alongside rising unemployment and a gradual improvement in inactivity, wage growth in the private sector has maintained a historic pace.
