Economic Indicators, September 2015

This month’s development

Concerns over Chinese Economy

Global stock prices fell following a devaluation of the renminbi and concerns over the impact of slowing Chinese growth.

Growth and Output

GDP grew by 0.7% in Q2 2015, in real terms, compared to Q1 2015. The OBR forecasts that GDP will grow by 2.4% in 2015.

Prices and Wages

UK inflation remains low, the CPI inflation rate was 0.1% in July, up from 0.0% the previous month.

The harmonised inflation rate for the European Union was also low, 0.1% in July 2015, with several countries experiencing deflation.

Labour Market

1.85 million people were unemployed in April-June 2015, 25,000 more than the previous quarter. Unemployment is down 221,000 on last year.

Finance and Borrowing

The FTSE-100 index fell by 7% over August and is currently 9% below its peak in June 2007.

Interest rates in the UK, Eurozone and US remain at historic lows. The Bank of England has left the Base Rate in the UK unchanged at 0.5% since March 2009 – the lowest since it was founded in 1694.

Trade and Exchange Rates

Sterling was up 8.9% against the euro over the year to 31^st August, but down 7.4% against the dollar.

Other indicators

Retail sales have seen the longest period of sustained growth since consistent records began in June 1996. Quantity bought grew for the 29th consecutive month.