Chart of the Week: UK avoids technical recession, but monthly data suggests output broadly flat through this year

The UK economy has avoided a technical recession, with output expanding by 0.3% in Q3 following a contraction of 0.2% in Q2. Nevertheless, the Q3 data were below both our own forecast (+0.5%), and the median forecast among private sector economists as surveyed by the Reuters Poll (+0.4%).

The relatively new monthly measure of GDP is erratic. However, it suggests that UK economic output has been broadly flat for much of this year. Positive growth contributions from the household sector have, by and large, been offset by negative growth contributions from investment as firms await greater clarity over the timing and the nature of the UK’s departure from the EU.