UK GDP growth is predicted to slump at 0.1% between January and March 2018, its lowest quarterly level since Q4 2012, according to the latest Money Statistics.
May’s Money Statistics reveals that the ONS predict Q1 2018 GDP growth to sit at 0.1%, its lowest estimate since Q4 2012, where the UK’s GDP actual deflated by 0.1%. This follows a disappointing year in GDP growth following the Brexit vote in 2016 where GDP increased over the year by 1.7%. This was its lowest annual growth since 2012 as well.
The Money Statistics also reports that Public Sector Net Debt fell by £49m every day in 2018, with inflation falling to 2.5% in March. Despite a sputtering economy, it seems that there are more positive signs elsewhere, with the aforementioned fall in public sector debt levels, and inflation finally falling closer to the 2% target set by the Bank of England.
Whilst the GDP growth estimates demonstrate the UK economy’s performance on a national level, this recent stagnation of growth has very real consequences for people’s wallets across the country also.
Without sustained and healthy levels of growth similar to that of our G7 counterparts, it is likely interest rates will also remain stagnant, continuing to encourage high debt levels and low saving priorities for UK consumers. It can also lead to less consumer spending and investment in UK businesses, causing worry for many large companies with offices based here.
Michelle Highman, Chief Executive of The Money Charity says:
“A stuttering economy can lead to low-interest rates, as seen in the 2008 recession, causing high levels of personal debt and low levels of savings and investments for many. It is important that a balance between credit and savings is struck, and it is a concern that we continue to see GDP growth diminish. We at The Money Charity promote good spending, saving and budgeting habits in order to help people get on top of their money. It is likely that if this GDP growth (or lack of growth) continues, there will be more and more people struggling to make the most of their money.”
Other key points from the May Money Statistics:
- According to Halifax, UK house prices fell by 3.1% between March and April 2018.
- The average debt to income ratio per adult in the UK stood at 114.4%.
- Workers auto-enrolled in workplace pension schemes increased to 9.614m in April.
Get the full picture and many more fascinating facts about money in the UK in our monthly Money Statistics.