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Weak GDP growth since early 2022 is forecast to continue into 2024, as the full effect of recent interest rate increases restrain economic activity. The inflation rate has fallen, with more gradual declines expected over the next year.

Headline Indicators summary

GDP is estimated to have been flat (0.0% growth) in July–September 2023 compared to the previous three-month period (April–June 2023). Eurozone GDP fell by 0.1% in July–September 2023.

Services output was up by 0.5% in the three months to September 2023 compared to the previous year. Manufacturing output rose by 3.0%.

CPI inflation was 4.6% in October 2023, down from 6.7% in September. Inflation in the Eurozone was 2.9% in October, down from 4.3% in September.

The Bank of England’s Monetary Policy Committee (MPC) left interest rates unchanged at 5.25% on 2 November for the second meeting in a row. This followed 14 consecutive rate increases.

Average wages excluding bonuses were 7.7% higher in the three months to September 2023 compared with the year before, and 1.0% higher after adjusting for inflation. CPI inflation for this period was 6.7%.

32.98 million people were in employment in July–September 2023, up 244,000 from a year before. The employment rate was 75.7%, up from 75.5% the previous year.

1.45 million people were unemployed in July–September 2023, up 224,000 from the year before. The unemployment rate was 4.2%. The UK harmonised unemployment rate for Q2 2023 was 4.2%, above the rate of Germany (3.0%) and the US (3.6%) but below that of France (7.3%).

Productivity across the whole UK economy improved by 0.7% in Q2 2023 compared with the previous quarter. Compared with the previous year, it was up by 0.3%.

Government borrowing in April–September 2023 was £82 billion, £15 billion more than in the same period last year. At the end of September 2023, public sector net debt was equivalent to 97.8% of GDP, compared to 95.7% a year before.

The UK had a trade deficit of £4.5 billion in the three months to September 2023, compared with a £9.9 billion deficit in the previous three months. The current account deficit was £25.3 billion in Q2 2023 (3.7% of GDP), up from £15.2 billion in Q1 2023 (2.3% of GDP).

The value of sterling fell by 1.1% between September and October, following a fall of 1.1% between August and September. Compared with a year ago, it is 4.6% higher.

The volume of retail sales fell by 1.1% in the three months to October 2023 compared with the previous three months, and decreased by 1.8% compared with the previous year.

GfK’s Consumer Confidence Index, which measures consumer attitudes, was at -30 in October 2023, down by nine points from -21 in September.

House prices decreased by 0.1% in the year to September 2023.

Household debt stood at 126.8% of disposable income in Q2 2023. This was its lowest level since at least 2007.

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