Date: Thursday 13 November at 6.00pm AEDT
For the second quarter (Q2), UK GDP grew a better-than-expected 0.3%, down from the first quarter’s (Q1) 0.7%, which was flattered by tariff-frontloading of business activity to beat the introduction of US tariffs.
At this week’s BoE meeting, the Monetary Policy Committee (MPC) voted 5–4 to hold the Bank Rate at 4%, resisting calls for a 25 bp cut to 3.75%. It highlighted ‘subdued economic growth and building slack in the labour market’ as disinflationary forces, with ‘weak growth in consumption and employment’ signalling rising spare capacity.
The preliminary expectation for Q3 GDP is for it to ease to 0.2% quarter-on-quarter (QoQ), another step-down from the first half’s (H1) tariff-boosted pace. Softer inflation, rising unemployment and a weaker growth profile has resulted in 15 bp of rate cuts being priced in for the BoE’s December interest rate meeting.
UK GDP growth rate chart