UK’s economic slowdown puts further strain on stagnant living standards

Published on Public Finances and the Economy

Commenting on the ONS’ preliminary estimate of GDP growth in Q4 2018, which showed that growth has slowed to 0.2 per cent (barely a third of the UK’s pre-crisis average of 0.7 per cent) and contracted sharply in December (by 0.4 per cent), Research Director James Smith said:

“Economic growth slowed markedly towards the end of 2018 amid a weakening global outlook and heightened Brexit uncertainty.

“We now know that the UK economy is 1.2 per cent smaller today than the OBR expected it to be before the 2016 referendum, amounting to around £800 a year for every household in the UK.

“The sharp contraction in December, coupled with measures of economic uncertainty picking up in recent weeks, mean it is likely that we will see further slowing from here.

“This is all the more concerning because, while economic growth has disappointed since the referendum, the living standards slowdown has been even starker – with households taking an annual £1,500 income hit since 2016.

“Today’s figures should remind politicians in all parties that how the country goes forward, not just where it is heading, will have a huge effect on living standards today and in the future.”