As the clock winds down to the 29th March Brexit deadline, the latest data on the UK economy paint a mixed picture of its performance. On a positive note, the number of people in work in the UK reached a high of 32.5 million in the three months to November 2018, based on figures released by the Office for National Statistics (ONS). Despite the uncertainty created by Brexit, it still appears that employers are continuing to take people on, although it should be noted that jobs figures traditionally lag behind the rest of the economy. Another positive is that average earnings excluding bonuses grew by 3.3% in the year to November 2018 and continue to outpace inflation, which is around 2.0%. New house price affordability data are due to be released by ONS at the end of March and it will be interesting to see whether the earnings increases are starting to have an impact on the affordability of homes.
Sounding a note of caution, the latest GDP data show that the UK economy grew by only 0.2% in the fourth quarter of 2018, down by 0.4 percentage points on Q3. Household spending remained the main driver of growth, although this was offset by falling investment. The latest ONS figures show that business investment fell for the fourth quarter in a row – the first time this has happened since the last recession in 2009.
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