UK Economic OutlookPosted on: Wednesday, 23 January 2019 1:48 pm
PricewaterhouseCoopers have suggsted that UK growth is to remain modest at around 1.3% in 2018 and 1.6% in 2019. This reflects the drag on business investment from ongoing economic and political uncertainty relating to the outcome of the Brexit negotiations. But the higher government spending and short-term tax cuts announced in the Budget will provide some boost to growth in 2019.
The strong global economy, and the competitive value of the pound, have boosted UK exports and inbound tourism over the past two years. But the Eurozone economy has slowed recently and any escalation of international trade tensions could dampen global growth in 2019 and beyond.
Service sector growth should remain modest but positive in 2019, but manufacturing growth has slowed markedly. Construction sector output has also fallen back since early 2017 and looks set to remain relatively weak in the short term, given the uncertainty around Brexit.
London has grown faster than other UK regions for most of the past three decades, but recently there have been signs from both the labour and housing markets that London’s relative performance has been less strong. We therefore expect London to grow at only slightly above the UK average rate in 2018-19.