Quarterly Economic Commentary - October To December 2022

2nd April 2023

Economic commentary for the latest quarterly national accounts, prices and labour market indicators.

UK gross domestic product (GDP) increased by 0.1% in Quarter 4 (Oct to Dec) 2022, leaving the economy 0.6% larger than a year earlier, as higher inflation and a tightening in financial conditions have weighed on the economy in recent quarters.

There was a narrowing in the UK current account deficit in Quarter 4 2022 to 0.4% of GDP, reflecting an improvement in net investment income; there were large disinvestments of other investments held by UK and foreign investors. 

The unemployment rate of 3.7% is close to the historical lows recorded in the mid-1970s, while broader measures of labour market availability are close to their lows, although the three-month change in vacancies has now declined for eight consecutive months.

There was an increase in the 12-month rate of Consumer Prices Index (CPI) inflation to 10.4% in February 2023, having fallen for the previous three months; core inflation remains elevated pointing to underlying inflationary pressures.

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