Is economic growth slowing down?

The Scottish referendum and the usual seasonal lull have not helped economic growth in the UK.

16 October 2014, words by Marie Hickey

 

■ While the UK is on track to outperform other developed nations this year, lead indicators suggest economic growth is slowing. The National Institute of Economic and Social Research (NIESR) estimate that output for Q3 will come in at 0.7%, 0.2 percentage points down on Q2.

■ UK manufacturing output decelerated month-on-month in August. Markit's/CIPS Purchasing Managers Index for the services sector, a lead indicator of growth, also pointed to a softening in expansion.

■ Some of this slowdown may reflect the usual summer lull and the impact of the Scottish Referendum. However, the weak Eurozone, the UK's largest export market, is no doubt exerting a drag.

■ Yet, newsflow remains mixed. The Financial Services sector expanded at its fastest rate since 2007 in Q3 according to CBI and PwC's quarterly survey, forecasting job growth of 28,000 by the year end. Good news for the office occupational markets.

■ Newsflow surrounding the UK economy, plus wider geopolitical stories, will no doubt exert influence over business and consumer confidence. It will be this confidence that will have the most significant bearing on economic growth, as seen historically.

click on graph 2 to enlarge

Graph 2

  

 
 

Key Contacts

Mark Ridley

Mark Ridley

Chief Executive Officer
Savills UK & Europe

Savills Margaret Street

+44 (0) 20 7499 8644

 

Marie Hickey

Marie Hickey

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 3320 8288

 

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