- Economic growth measures the change in real GDP (national income adjusted for inflation; ONS call it chained volume measure of GDP)
- In 2016 the UK economy grew by 1.8% – (compared to 2.2%) in 2015.
- In the first half of 2017, the economy has grown by just 0.5% (annualised growth of 1%) Q1 0.2% | Q2 0.3%
- The peak to trough fall of the economic downturn in 2008/2009 is now estimated to be 6.0%
- Figures for Q2 2017 show the economy is reliant on consumer spending, with industrial output and construction in decline.
- Real GDP per capita (economic growth/population) is growing at slower rate, due to population growth
- Updated July 28th, 2017
Recent UK Economic Growth
Economic growth per GDP
With population growth averaging around 0.6 – 0.8% a year (about 50% of population growth is caused by net migration), real GDP is boosted by this growth in population. Real GDP per capita and average incomes are growing at a slower rate.
Recent history of economic growth
- Since the recession of 1992 ended, the UK experienced a long period of economic growth – it was the longest period of economic growth on expansion. Also, the growth avoided the inflationary booms of the previous decades. However, the credit crunch of 2007-08 hit the UK economy hard and caused a steeper drop in real GDP than even the great depression of the 1930s. Helped by a loosening of monetary and fiscal policy, the UK experienced a partial recovery in 2010 and 2011. But, by Q1 2012, the UK was back in recession.
- The second double dip recession was caused by a variety of factors including European recession, lower confidence caused by austerity measures, continued weakness of bank lending and falling real incomes.
- Since the start of 2013, the UK economy has experienced positive economic growth – one of the relatively best performances in Europe. However, real GDP is still fractionally below its pre-crisis peak of 2007.
- Faltering recovery? The recovery has been stronger in the service sector than manufacturing and industrial output. There are fears the UK recovery is still unbalanced – relying on consumer spending, service sector and ultra-loose monetary policy.
- Also, real wage growth has been weak, due to low wage growth, and spike in inflation due to devaluation.
It is worth bearing in mind that sometimes economic growth statistics get revised at a later stage.