United Kingdom Economic Snapshot

Reform Priorities (July 2019)

17 October 2017 - Economic Survey of the United Kingdom

Economic performance was solid until the end of 2016, stimulated by a strong businessfriendly environment, very supportive and reactive monetary policy, and a flexible approach in meeting fiscal goals. The pace of economic expansion has been steady and gross domestic product (GDP) is about 9% above the peak just before the global crisis, but the economic consequences of the planned exit from the European Union (EU) in March 2019 (Brexit) cut growth to the lowest annualised rate in the G7 in the first half of 2017. Growth, high labour market flexibility and large labour supply have pushed the unemployment rate down to below 4.5%. Economic activity has been particularly job-rich. Both the employment rate at 75% for people aged 16 to 64 and total hours worked are the highest on record, partly due to immigration from the European Union which has expanded the labour market. Fiscal sustainability has also improved, with the budget deficit falling towards 3.0% of GDP and public debt stabilising at below 90% of GDP in 2016. Prudential policies have bolstered financial stability, but new pockets of risks have emerged and Brexit uncertainties have led to pressures to relocate some financial activities overseas.