How is the UK Economy Faring?

The UK economic outlook is decidedly less rosy than it was just four months ago with reports of an £18 billion 'black hole'. Ahead of today's Budget, we investigate

Andy Brunner 16 March, 2016 | 8:11AM

Healthy household and government spending growth means the UK economy is expected to have grown 0.5% in the last three months of 2015, but there was a decline in investment, possibly due to EU referendum concerns.

The latest data continues to be mixed with strong retail sales in January, up 2.3% on the previous month, and solid consumer fundamentals. But investors should remember retail sales correlate poorly with GDP consumption data. Mortgage approvals are also rising but industrial production disappointed in December.

Purchasing Managers' Index is often an accurate indicator of economic health across the private sector, tracking variables such as output, new orders, employment and prices across key sectors. The latest figures revealed worryingly weaker business conditions – the manufacturing sector was 50.8, down from 52.9, and services 52.7, down from 55.6.

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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