UK economy latest

This page provides commentary and charts on the latest changes in the UK economy, using novel and rapid data sources as well as official statistics.

We explain the reasons behind each change as much as possible, although it can be difficult to separate the impacts of different things such as Brexit and COVID-19.

For an overview of our main economic indicators, visit our dashboard.

This page was last updated at 09:30 on 6 October 2022.

Nearly 40% of businesses have passed on price rises to their customers

6 October 2022

In late September 2022, UK businesses not permanently stopped trading were asked to what extent they had already passed through higher costs to prices. This refers to businesses’ changes in the prices of goods or services, following an increase in the costs incurred producing them.

More than a quarter (27%) of businesses reported that they had passed on less than 50% of their higher costs to their customers, while 11% reported that they had passed on 50% or more.

In late September 2022, the proportion of businesses who reported that they had already passed on higher costs to customers were:

• more than 75% of cost increases: 5% of businesses passing on costs
• between 50% and 74%: 5%
• between 25% and 49%: 10%
• less than 24%: 17%

The wholesale and retail trade; repair of motor vehicles and motorcycles industry reported the highest proportion of businesses who have passed on more than 75% of their higher costs, at 11%.

In contrast, the human health and social work activities (private sector businesses only) reported the highest proportion of businesses who had passed on less than 24%, at 31%.

Businesses commented that they were reluctant to pass higher costs onto customers because of concerns about customers having less disposable income and fears that competitors will undercut them.

• Read our latest bulletin on Business insights and impact on the UK economy

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Spending up in most sectors

6 October 2022

Spending increased in all sectors except for “pubs, restaurants and fast food” in the week to 2 October 2022, according to Revolut debit card transaction data.

Spending was down 2 percentage points in the “pubs, restaurants and fast food” category compared with the previous week, although this was still 18 percentage points higher than the same time last year.

The largest week-to-week increase was in the “retail” category, which rose by 24 percentage points from the previous week and was 25 percentage points higher than the same time in 2021. The “entertainment” category also saw increased spending, up 10 percentage points compared with the same time last year. Entertainment spending has yet to return to pre-coronavirus levels since the first lockdown.

Overall retail footfall in the UK in the week to 2 October was 108% that of the previous week and 88% that of the equivalent week of 2019. The largest increases were in shopping centres and retail parks, where footfall measured at 115% and 113% of the previous week, respectively.

There was also a 5-percentage-point increase in seated diners in the UK in the week to 2 October. This was 118% of the level recorded during the same week of 2019. In London specifically, the level of seated diners was 3 percentage points higher than the previous week but 13 percentage points below the equivalent week in 2019.

Changes in week-to-week consumer behaviour will be affected by activity related to the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II. Spending will also be affected by changes in prices.

• Read our latest bulletin covering real time indicators on economic activity and social change in the UK

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Households saved more than a quarter of their annual income during lockdowns

30 September 2022

Because of methodological changes, households appear to have been saving more during the coronavirus (COVID 19) lockdowns than originally first thought, while real incomes have been decreasing over recent quarters.

Since Quarter 2 (Apr to June) 2020, the household saving ratio has seen a shift upwards, suggesting that households were saving more of their income than we previously thought. The saving ratio peaked at 26.8% in Quarter 2 2020, meaning that more than a quarter of total household income was saved as coronavirus pandemic lockdowns restricted opportunities to spend.

These calculations were revealed following an update of data sources used to calculate the household saving ratio in the UK. The ratio has been revised by an average of negative 0.2 percentage points annually, between 1997 and 2019.

Using our new data, Quarter 2 (Apr to June) 2022 is now the fourth consecutive quarter of real negative growth in disposable income. Driving the rise in household expenditure this quarter were increases in the cost of electricity and gas and price increases at restaurants and cafes.

Our latest estimates now show that household saving has still not dropped to the level seen in Quarter 4 (Oct to Dec) 2019, the last full quarter not affected by coronavirus restrictions.

Despite household saving remaining higher than before the coronavirus pandemic, real household disposable income (RHDI) fell by 1.2% this quarter. Nominal household gross disposable income grew by 1.8% but was offset by quarterly household inflation of 3.1%; the largest quarterly growth in household inflation since Quarter 4 1981, when it was 3.2%.

• Read our latest bulletin on UK Economic accounts: April to June 2022

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Cost of living increases prompt adults to look for better-paid work

30 September 2022

Around 1 in 5 working adults (19%) has reported looking for better-paid work in response to the cost of living crisis, including promotion.

The latest release on Public opinions and social trends for Great Britain also showed that in the period 14 to 25 September 2022, 15% of working adults were working more hours than usual in their main job because of increases in the costs of living.

Most working adults (63%) reported they were not doing anything differently in terms of their work situation because of increases in the cost of living.

The survey also revealed that around three-quarters (76%) of adults were very or somewhat worried about the cost of living.

The cost of energy was also concerning adults in the period 14 to 25 September 2022.

Around 4 in 10 (44%) of adults who pay energy bills said they found it very or somewhat difficult to afford them in the latest period.

Around 3 in 10 (28%) of those who are currently paying rent or mortgage payments reported finding it very or somewhat difficult to make these payments.

• Read more about Public opinions and social trends, Great Britain: 14 to 25 September 2022

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UK GDP is estimated to have risen by 0.2% in Quarter 2 2022

30 September 2022

The first quarterly estimate of UK gross domestic product (GDP) shows an estimated rise of 0.2% in Quarter 2 (Apr to June) 2022, upwardly revised from a first estimate of a 0.1% fall.

The level of real GDP is now estimated to be 0.2% below where it was pre-coronavirus (COVID-19) at Quarter 4 (Oct to Dec) 2019, downwardly revised from previous estimates of 0.6% above.

There was a slowing in services output from 0.8% in Quarter 1 (Jan to Mar) 2022 to 0.2% in Quarter 2 2022. This was underpinned by an easing in the output areas of information and communication, and professional, scientific and technical activities. There was also continued weakness in the output produced by the wholesale and retail trade, and health industries.

Production output saw a revised downward fall of 0.2% in Quarter 2 2022 from an increase of 0.5% at the first quarterly estimate. This was driven by a 1.1% fall in manufacturing output, particularly in the manufacture of computer, electronic and optical products; manufacture of chemicals and chemical products; and manufacture of rubber and plastics products, and other non-metallic minerals.

Construction output rose by 1.1% in Quarter 2 2022, revised down from a first quarterly estimate of 2.3%. Seven of the nine construction sectors saw an increase in Quarter 2 2022, primarily driven by new work, and repair and maintenance.

Revisions to GDP have meant a sharper contraction in 2020 followed by a stronger recovery through the pandemic.

Estimates show that UK GDP contracted by a downwardly revised 11.0% in 2020, reflecting the effects of COVID-19 restrictions, while UK GDP is now estimated to have expanded by an upwardly revised 7.5% in 2021.

• Read our latest bulletin on UK quarterly GDP.
• Read our latest bulletin on monthly GDP.

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Consumer spending falls, with fuel purchases down

29 September 2022

Card spending on “automotive fuel” in the UK fell by 10 percentage points in the latest week, according to data from Revolut.

However, despite the recent falls, spending on automotive fuel was 12 percentage points higher than it was in the equivalent week of 2021.

There were also falls in “food and drink” spending, which fell 5 percentage points and has been falling steadily since mid-August 2022.

According to Springboard, overall weekly retail footfall in the week to 25 September 2022 was 93% of the previous week, with falls in all English regions and UK countries.

UK seated diners fell by 7 percentage points in the same period, and Pret a Manger transactions fell at most UK locations.

Weekly changes will have been affected by the State Funeral of Her Majesty Queen Elizabeth II on 19 September 2022.

• Read our latest bulletin on economic activity and social change in the UK, real-time indicators

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