Monthly Headlines:
- Q3 UK GDP growth revised downwards with slower than expected service sector growth
- The Q4 2015 QES signals slower near-term growth for the UK economy
- US raises interest rates as monetary policy loosens further in the Eurozone
The latest review (based on December 2015 data releases) shows that UK economic growth has been revised downwards from 0.5% to 0.4%. This downward revision was driven partly by the service sector growing more slowly than expected.
The UK labour market remains a key area of strength, with unemployment falling. Despite wages rising faster than prices, total pay growth slowed.
The UK trade deficit widened to £14.1 billion from £9.7 billion. The widening deficit was driven by a fall in exports and a rise in imports. This deterioration is mirrored in the latest QES resultsfor Q4 2015,where Norfolk’s manufacturers export sales balances fell to its lowest level since Q3 2009.
Interest rates in the US, the world’s largest economy were increased for the first time since 2006. The rates move reflected the improving outlook for the US economy. In contrast the European Central Bank further loosened monetary policy within the Eurozone and extended its monthly €60 billion stimulus programme. Whilst the Bank of England kept UK interest rates on hold at 0.5%.
Overall, last month’s data releases provides evidence that although the economic outlook for the UK remains broadly positive, there are mounting headwinds facing the UK economy. To read the full report click here.
