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B2B Economic Outlook - UK - September 2019

What you need to know

In Q2 2019 GDP declined by 0.2%, continuing a consecutive trend of declining growth since 2014 as the manufacturing sector contracted sharply. Whilst the services sector grew, its rate of growth was far lower than the previous quarter.

The Monetary Policy Committee (MPC) voted unanimously to maintain the Bank Rate and made no changes to its stock of sterling non-financial investment-grade corporate bond purchases, exercising caution in the face of economic uncertainty due to Brexit.

Inflation remains near-target at 2.1%, as effects of sterling depreciation subsides. The prices of inputs for manufacturers fell off the back of declining crude oil prices, whilst the price of services grew slightly, led by increases in transportation & storage and information & communications. Wages grew by the strongest rate since September 2015, driven by increase to NHS staff pay, and in the context of tightening labour market.


“The UK economy continues to show signs of slowdown, with GDP reversing slightly as a no-deal Brexit appears increasingly likely. Brexit-related uncertainty continues to hold back investment and confidence, but have so far only materialised as slower growth.
A no-deal Brexit is expected to have a major impact on the services sector, directly through the loss of right to provide services overseas, and indirectly through the disruption of supply chains and the services provided across them, including insurance, logistics and legal services.
These risks come at a time of global economic uncertainty due to trade tensions and slowing growth, which together with the threat of a no-deal Brexit; indicate a difficult period ahead for the UK economy.”
– Francesco Salau, B2B Analyst

This Report looks at the following areas:

  • Economic overview
  • Business health
  • Special focus: services
  • What’s next?

What you get

What's included

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Table of contents

  1. Overview

      • What you need to know
        • Economic overview
          • Business health
            • Special focus: services
              • What’s next?
              • Economic Overview

                • GDP contracts for the first time since 2012
                  • Figure 1: UK GDP growth rate, 2012 – Q2 2019
                • Bank rate remains at 0.75% as the BoE exercises caution
                  • Figure 2: Bank rate, by date of adjustment, 2008-18
                • Currency-driven inflation subsides to leave CPI on target
                  • Figure 3: Consumer Price Index, 12-month rate, July 2018-July 2019
                • Weekly earnings close to recovering ground lost since 2008
                  • Figure 4: Year-on-year change to average weekly earnings, June 2018-June 2019
              • Business Health

                • Future turnover performance threatened by economic uncertainty
                  • Figure 5: Annual UK business turnover by business sector, % change, 2018
                • Business investment and confidence recover slightly but prospects remain negative
                  • Figure 6: UK business investment, £ million, Q1 2015-Q2 2019
                  • Figure 7: ICAEW UK National Business ConfidenceTM index, Q3 2013-Q3 2019
                • Business insolvencies stay within recent trends
                  • Figure 8: Company insolvencies in England and Wales, seasonally adjusted, Q1 2017-Q2 2019
              • Special Focus: B2B Services

                    • Figure 9: EU most favoured nation tariffs on selected product groups and their share in EU imports
                  • Effects of a no-deal Brexit on UK services
                    • Legal services
                      • Estate agents
                        • Figure 10: Percentage change in UK residential house prices by selected regions, all types of property, September 2015-June 2019
                        • Figure 11: UK residential home sales volumes by selected regions, all types of property, 000s (left and right axis), October 2015-April 2019
                      • Courier and express delivery
                      • What’s Next?

                        • GDP growth faces the risk of recession in 2019
                          • Figure 12: UK GDP growth rate, 2012-Q2 2019
                          • Figure 13: Forecasted UK GDP growth rate, 2019-22
                        • Economic uncertainty will continue to hold back growth and investment
                          • Global economy faces headwinds from political and economic uncertainty
                            • Figure 14: OECD Business Confidence Index (BCI), June 2016-June 2019
                          • Falling bond yields signal uncertainty over the global economy
                            • Figure 15: Government bond yields in selected countries, % yield, 22 August 2019
                        • Appendix – Data Sources, Abbreviations and Supporting Information

                            • Abbreviations
                              • Methodology

                              B2B Economic Outlook - UK - September 2019

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