February 11, 2019

Chart of the Week: UK economy slows as business investment falls for fourth quarter in a row

by Fathom Consulting.

According to the preliminary estimate of GDP, the UK economy slowed during the final quarter of last year, with output increasing by just 0.2%. Looking at the expenditure components, both household and government expenditure made positive contributions, while net trade and investment were a drag on growth. It is notable that business investment has now fallen for four consecutive quarters, for the first time since the financial crisis of 2008/09. This demonstrates how uncertainty about the macroeconomic outlook can have real effects. Our own calculations suggest that uncertainty following the EU referendum has increased the required return to UK investment projects by more than 200 basis points.

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