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Economic Indicators, November 2015

This month’s developments

GDP growth

GDP growth in Q3 2015 was 0.5% compared with the previous quarter. This is slightly down from Q2 2015 when growth was 0.7%. Full-year growth in 2015 is forecast to be around 2½%.

Growth in Q3 2015 was driven by the services sector, which saw output increase by 0.7%. In contrast, output in the manufacturing sector fell by 0.3% and there was a 2.2% decline in the construction sector.

Inflation

Consumer price inflation (on the CPI measure) fell to ‑0.1% in September, down from 0.0% in August. Annual inflation, has hovered around 0% for most of the year, due to lower fuel and food prices compared with a year ago.

Labour market

The employment rate (the proportion of the population aged 16-64 in work) was 73.6% in the three months to August 2015 – the highest since comparable records began in 1971. This is 0.6 percentage points higher than the previous year.

The unemployment rate fell to 5.4% in the three months to August 2015. This is the lowest rate since April-June 2008 (5.4%) and compares to a post-recession high of 8.5% in late 2011.

Average weekly total pay increased by 3.0% in the three months to August 2015 compared with the previous year.

Public finances

Public sector net borrowing, the main measure of the budget deficit, was £46.3 billion in the first half of the current fiscal year. Net borrowing was £7.5 billion (or 14%) lower compared with the same period in the previous fiscal year.