Business investment remained stable in the United Kingdom at GBP 49.2 billion this autumn, after a 0.4 per cent fall in the previous period and compared with market expectations of a 0.5 per cent decline.
The Bank of England, in its “Summary of business conditions” reported that investment intentions remained at a nine-year low. Business investment went down 0.6 per cent year-on-year, following a 1.4 per cent decline in the second quarter of 2019 and compared with market forecasts of a 1.3 per cent decrease.
The volume of private investment in the United Kingdom averaged 0.95 per cent from 1967 until 2019, reaching an all-time high of 51.50 per cent in the first quarter of 1997 and the lowest of -11.40 per cent in the second quarter of 1985. (source: Office for National Statistics).
Private investment in the United Kingdom is expected to be -0.80 per cent by the end of this quarter, according to analysts expectations. In the long-term, the United Kingdom business investment is projected to trend around 0.70 per cent in 2020. In short-term perspective, analysts estimate private investment in the United Kingdom to stand at 0.90 in 12 months.
The UK economy expanded 0.3 per cent on average in the three months to September of 2019, following a downwardly revised 0.2 per cent growth in the previous period and below market expectations of 0.4 per cent. The main contributor to growth was the services sector, which expanded by 0.4 per cent. (United Kingdom GDP 3-Month Average). British markets show more than two times lower inflation rate than, for example, Russia, and have stable business confidence level.
Fig. 1. Forecast of the business investment level in the United Kingdom
source: tradingeconomics.com
Fig. 2. Private investment in the United Kingdom
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