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December 2022

The Chancellor’s November Autumn Statement was accompanied by official forecasts painting a gloomy picture of the economy over the medium term. Economic data released in recent weeks seems not to have brought better news.

Headline Indicators summary

GDP fell by an estimated 0.3% in August-October 2022 compared to the previous three-month period (May-July). This compares to growth of 0.3% in the Eurozone in Q3 2022.

Services output was up by 2.4% in the three months to October 2022 compared to the previous year. Manufacturing output fell by 5.5%.

CPI inflation was 10.7% in November 2022, down from 11.1% in October. Inflation in the Eurozone was 10.1% in November, down from a record high of  10.6% in October.

The Bank of England’s Monetary Policy Committee (MPC) raised interest rates to 3.5% on 15 December, up from 3.0%. This was the ninth rate rise in a row.

Average wages excluding bonuses were 6.1% higher in the three months to October 2022 compared with the year before. CPI inflation for this period was 10.4%.

32.74 million people were in employment in August-October 2022, up 191,000 from a year before. The employment rate was 75.6%, up from 75.4% the previous year.

1.25 million people were unemployed in August-October 2022, a fall of 176,000 from the year before. The unemployment rate was 3.8%. The UK harmonised unemployment rate for Q3 2022 was 3.6%, above the rate of Germany (3.0%) and equal to the US (3.6%) but below that of France (7.2%).

Productivity across the whole UK economy increased by 0.2% in Q3 2022 compared with the previous quarter. Compared with the previous year, it was up by 1.4%.

Government borrowing in the financial year to November 2022 was £105.4 billion according to the ONS’s latest provisional estimate, £7.6 billion less than in the same period last year. At the end of November 2022, public sector net debt was equivalent to 98.7% of GDP, compared with 99.0% a year ago.

The UK had a trade deficit of £9.6 billion in the three months to October 2022, compared with a £22.5 billion deficit in the previous three months. The current account deficit was £33.8 billion in Q2 2022 (5.5% of GDP), down from £43.9 billion in Q1 2022 (7.2% of GDP).

The value of sterling rose by 1.4% between October and November 2022, following a rise of 0.8% between September and October. Compared with a year ago, it is 4.3% lower.

The volume of retail sales decreased by 2.2% in the three months to November 2022 compared with the previous three months, and decreased by 6.2% compared with the previous year.

GfK’s Consumer Confidence Index, which measures consumer attitudes, was at -42 in December 2022, up by two points from -44 in November.

House prices increased by 12.6% in the year to October 2022.

Household debt stood at 133.9% of disposable income in Q2 2022. It has been around this level since mid-2017.

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