The Saturday Economist, UK Economic Outlook, September 2015. Latest forecasts following ONS Second Estimate of GDP released at the end of August. We still forecast growth of 2.8% this year and into next despite the fears about China and sluggish growth in Europe.

1. The Saturday Economist
UK Economic Outlook September 2015 Page 1
The Saturday Economist
UK Economic Outlook
Q3 2015 (September edition)
Service sector drives recovery …
construction weakens in second
quarter

2. The Saturday Economist
UK Economic Outlook September 2015 Page 2
The UK recovery continues. We expect growth of
2.8% in 2015 … and 2.9% in 2016.
In this September economics update we forecast world growth of 2.9% in 2015 increasing to 3.1% in 2016. UK
Inflation will average just 0.5%, CPI basis, over the balance of the year. Unemployment will continue to fall,
government borrowing will also fall. The service sector will lead the recovery as manufacturing and construction output
also rise.
We are forecasting a modest increase in manufacturing of around 1.5% with a 4.5% increase in construction activity as
the strong housing market recovery continues. The trade figures will continue to disappoint, offset by a potential £4
billion oil dividend, as a result of the oil price collapse. The challenge to the current account following the drop in
overseas investment income continues and will present a significant problem to the outlook for sterling over the
medium term.
In the UK we expect the economy to grow by 2.8% in 2015
following growth of 3.0% last year. In the US the recovery
continues with growth of 2.8% expected in the year ahead.
The inflation outlook is much more benign, with the fall in world
oil, energy, food and commodity prices continuing to dominate
headline inflation.
The UK economy grew by 2.6% in the second quarter, revisions
to construction and investment growth boosting the figures.
The service sector continues to drive growth.
We expect base rates to rise in 2015 Q4 …
UK GDP growth %
-6.0
-4.0
-2.0
0.0
2.0
4.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2.92.83.0
1.7
0.7
1.2
1.6
-5.2-0.8
3.4
2.8
3.2

3. The Saturday Economist
Contents
Chapter 1 The World Economy page 4
Chapter 2 World Trade and Oil Prices page 6
Chapter 3 UK Economics Growth in UK GDP (O) Output page 7
Chapter 4 UK Economics Growth in UK GDP (E) Expenditure chained page 9
Chapter 5 UK Economics Growth - Investment - mind the gap? page 11
Chapter 6 UK trade in goods and services page 13
Chapter 7 Labour market trends page 14
Chapter 8 Government Borrowing page 15
Chapter 9 Inflation Outlook page 16
Chapter 10 Interest Rates - base rates and gilt yields page 17
Appendices page 18
Chapter 1 World Economy
UK Economic Outlook September 2015 Page 3
… the recovery continues.

4. The Saturday Economist
UK Economic Outlook September 2015 Page 4
Chart 1.1 : World GDP growth
%
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2005 2007 2009 2011 2013 2015
• The world economy is expected to have
grown by 2.6% in 2014. We forecast growth
of 2.5% in 2015 and 3.1% in 2016.
• Recovery in the USA and UK, will continue.
We expect growth of 2.8% in US in 2015 and
3.0% in 2016.
• Slower growth is expected in the oil
producing economies of OPEC, Russia and
Venezuela. The setback in Russia will be a
particular problem with some analysts
expecting the economy to shrink by -3.5%.
• On a regional basis, growth in Sub Saharan
Africa and the Asia Pacific region will
continue at around 4.5%.
• Recovery in North America is expected to
accelerate as US growth impacts on Mexico.
In Canada, growth will moderate slightly as
oil prices impact on oil output.
• In South America, we expect zero growth in
2015 with continuing problems in Venezuela,
and Argentina. Negative growth in Brazil
(0.9%) will impact on the region.
• In Eastern Europe problems in Russia and the
Ukraine, will weigh on the growth prospects
for the region. Growth of just 0.1% is
expected this year, rising to 1.8% in 2016.
• Growth in Western Europe will improve led by
a recovery in Germany. We expect growth of
1.5% in 2015, increasing from 1.2% in 2014.
• In the Eurozone, we expect growth of 1.2%
up from 0.8% in 2014. We do not expect
much from any early QE expansion.
• World trade is expected to grow by 3.2% in
2015 and 3.5% in 2016.
• World prices for energy, particularly oil,
primary metals, food and manufactures will
remain subdued.
• We expect oil prices to rally to $75 per barrel
Brent Crude basis by the final quarter of
2015. cf a forecast average - $55 in Q3 2015.
• Overall the recovery in the world economy
will continue, with limited acceleration in
price levels through this year.
Chart 1.2: World Trade growth
%
-16.0
-12.0
-8.0
-4.0
0.0
4.0
8.0
12.0
16.0
2005 2007 2009 2011 2013 2015

5. The Saturday Economist
The estimates are produced with heavy reliance on world trade forecasts from the European Union, the IMF, the OECD, the World Bank and the NIESR world
model. Additional data is derived from the USA Bureau of Economic Affairs. World trade data is developed from the CPB World Trade Monitor, produced by
the CPB Netherlands Bureau for Economic Policy Analysis. We also utilise the Consensus Economics data : Consensus Forecasts, Asia Pacific, Latin
America and Eastern Europe. The Top Ten economies in the world account for approximately two thirds of global GDP.
Table 1 World Economy GDP Growth %
Top Ten Markets 2010 2011 2012 2013 2014 2015 2016
United States 2.5 1.8 2.8 2.2 2.4 2.6 2.8
China 10.4 9.4 7.7 7.6 7.4 6.9 6.8
Japan 4.7 -0.4 1.4 1.6 -0.1 0.9 1.7
Germany 4.0 3.3 0.7 0.4 1.6 1.9 2.0
France 1.6 2.0 0.0 0.3 0.2 1.2 1.6
Brazil 7.5 2.7 1.0 2.5 0.1 -1.9 0.2
United Kingdom 1.6 1.2 0.7 1.7 3.0 2.8 2.9
Italy 1.7 0.6 -2.4 -1.8 -0.4 0.7 1.2
Russia 4.5 4.3 3.4 1.3 0.6 -3.5 0.4
India 7.5 6.7 4.5 4.7 7.3 7.7 8.0
World GDP 4.5 3.4 2.7 2.6 2.6 2.5 3.1
World Trade % 14.6 6.0 2.1 2.8 3.2 3.2 3.5
UK Economic Outlook September 2015 Page 5

6. The Saturday Economist
Chapter 2 World Trade and Oil Prices …
… no worries about inflation.
UK Economic Outlook September 2015 Page 6
Chart 2.3 :World Commodity Prices
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
2005 2007 2009 2011 2013 2015
Chart 2.1 : Oil Prices $ per barrel
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2005 2007 2009 2011 2013 2015
• Oil price Brent Crude basis averaged $99 per
barrel in 2014, falling to $50 in the final
quarter. The average price Q2 2015 was $62.
• We expect oil prices to average $55 in the
third quarter of 2015 rising to $75 (Brent
Crude basis) by the end of the year.
• World trade prices fell by -2.1% in 2014 and
by an estimated -6.7% in the final quarter
• We expect world trade prices to remain under
pressure falling by a further -10% in 2015
recovering to 0.5% growth in 2016.
• We believe basic metal prices including,
copper, zinc, lead, aluminium and iron
have reached a basic floor level which
will lead to a moderate recovery by 2016.
• Precious metals, gold, silver and
p l a t i n u m h a v e d e m o n s t r a t e d
consolidation with gold trading at around
$1,100 in August 2015.
• World commodity prices, excluding fuel (chart
2.3) have been extremely volatile increasing
by over 25% in 2006 and 2010.
• In 2013, commodity prices fell by 4.7% with a
further fall of 2.1% 2014. We expect prices to
fall further in 2015 with a strong rally in 2016.
• Trends in world trade, world trade prices and
commodity prices continue to suggest a
modest world recovery, with some growth in
Europe. No inflationary pressure evident.
Chart 2.2 : World Trade Prices
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2005 2007 2009 2011 2013 2015

7. The Saturday Economist
Chapter 3 Growth in UK GDP (O) Output
UK Economic Outlook September 2015 Page 7
• We model UK GDP growth in the first
instance using our pragmatic GDP (O) model.
On this basis we employ more conventional
business modelling techniques including,
ARIMA, exponential smoothing, pattern
recognition and econometrics.
• We also utilise the Manchester Index® as part
of our “nowcasting” model, producing a short
term steer on directions within the UK
economy.
• Following growth of 1.7% in 2013 and growth
of 3.0% in 2014, we now expect growth of
2.8 % in 2015 rising to c2.9% in 2016.
• The service sector will continue to underpin
growth in the economy. Following growth of
3.0% in 2014, we expect service sector
growth of 3.0% in 2015 and 3.2% in 2016.
• Construction output, driven by developments
in housing and infrastructure, is expected to
increase by 4.5% in 2015 and 3.9% in 2016,
following revised growth of 9.5% in 2014.
• Manufacturing output remains almost 5%
below the peaks registered in 2008 prior to
recession.
• Following an increase in manufacturing
output of 3.1% in 2014, we expect growth of
1.5% in 2015 and 2.1% in 2016.
• Within the service sector, the leisure sector is
expected to show strong growth along with a
strong performance in business services,
transport and finance.
• Overall, the UK will experience strong growth
in output over the next two years. [We estimate
the long term trend rate of growth to be 2.7%
following latest data revisions. We do not share
concerns about UK productivity.]
• The service sector will continue to underpin
growth in the UK assisted by developments in
manufacturing and construction. The surge in
housing building activity is expected to
continue into the year despite the poor
performance in the firs quarter.
Chart 3.1 : UK GDP growth %
-6.0
-4.0
-2.0
0.0
2.0
4.0
2005 2007 2009 2011 2013 2015
Chart 3.2 : Service Sector %
-6.0
-4.0
-2.0
0.0
2.0
4.0
2005 2007 2009 2011 2013 2015
… our overall forecast for growth in 2015 is 2.8%.

8. The Saturday Economist
Full details and charts of the GDP(O) forecasts are available in the appendix data. Revisions since the last forecast relate to construction and manufacturing.
The forecast is consistent with the Second Estimate of GDP Q2 2015 released by the ONS on the 28th August 2015.
Table 3 UK GDP (O) Growth %
Key Sectors 2010 2011 2012 2013 2014 2015 2016
Agriculture … -0.7 8.5 -4.6 -3.9 9.1 -1.3 0.3
Extractives -2.4 -14.2 -10.8 -2.5 -0.2 -0.2 -3.0
Manufacturing 4.2 1.8 -1.3 -0.7 3.1 1.5 2.1
Electricity, Gas 4.0 -6.2 -0.8 0.3 -5.9 2.2 2.7
Water, Sewage -1.3 5.3 -0.9 3.3 0.2 1.8 1.5
Total Production 2.9 -0.8 -2.7 -0.5 1.7 1.3 1.3
Construction 8.3 2.1 -7.5 1.4 9.5 4.5 3.9
Service Sector
Leisure 1.0 1.9 1.5 3.5 4.8 4.5 4.0
Transport 3.0 1.8 1.4 1.4 2.6 4.2 3.6
Business et al 0.4 3.2 3.0 2.5 3.8 3.5 4.1
Education, Hth 0.3 0.9 1.4 0.3 1.1 0.9 1.2
Total Services 0.8 2.0 2.0 2.0 3.0 3.0 3.2
Total GDP (O) 1.6 1.2 0.7 1.7 3.0 2.9 2.8
UK Economic Outlook September 2015 Page 8

9. The Saturday Economist
Chapter 4 Growth in UK GDP (E) - Expenditure chained measure
UK Economic Outlook September 2015 Page 9
• We continue to offer little hope for the
rebalancing agenda in our forecasts for
growth in expenditure.
• Household expenditure increased by 2.6% in
2014. We expect growth of 3.0% in 2015 and
2.6% in 2016.
• Government expenditure increased by 1.6%
in 2014. Government expenditure is expected
to increase by 2.1% in 2015, slowing to 1.8%
in 2016.
• Investment increased by 8.6% in 2014. We
expect growth of 4.9% in 2015 and 5.0% in
2016.
• Domestic expenditure increased by 3.5% in
2014 with a significant contribution from
inventory build. We expect growth of 2.5% in
2015 and 3.0% in 2016.
• Net trade will continue to have a negative
impact on growth, with exports increasing at
a slightly slower rate than imports.
• We expect exports to increase by 4.2% in
2015 and 2.7% in 2016 following growth of
just 0.5% in 2014..
• Imports increased by 2.4% in 2014. We
expect growth of 4.0% in 2015 and 2.8% in
the following year.
• Our GDP Expenditure model is consistent and
balanced with the ONS data. We forecast
GDP(E) growth of 2.8% in 2015 and 2.9% in
2016.
• The trade deficit will continue to be have a
negative impact on UK GDP but of itself will
not be a constraint to growth.
• We continue to caution on the overall current
account deficit. In the first quarter of 2015 the
deficit averaged 5.8% of GDP.
• *We estimate a 10% fall in the oil price is worth
some £1 billion to the UK trade account. The UK
may experience a £4 billion boost to net trade as a
result of the oil price.
Chart 4.1 : Households %
-4.0
-2.4
-0.8
0.8
2.4
4.0
2005 2007 2009 2011 2013 2015
Chart 4.2 : Investment %
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
2005 2007 2009 2011 2013 2015
… our investment outlook is largely unchanged.

10. The Saturday Economist
Table 4 UK GDP (E) Expenditure Chained Measure %
Expenditure 2010 2011 2012 2013 2014 2015 2016
Households 0.5 -0.1 1.5 1.7 2.6 3.0 2.6
NPIs -1.4 3.7 -6.2 0.7 0.9 2.1 2.2
Government 0.0 0.0 2.3 -0.3 1.6 2.1 1.8
Investment 5.9 2.3 0.7 3.4 8.6 4.9 5.0
Inventories - - - - - - -
Domestic Exp 2.7 0.3 1.4 1.8 3.5 2.5 3.0
Total Exports 6.2 -1.2 7.6 1.5 0.5 4.2 2.7
Gross Final Exp 3.4 0.0 2.8 1.7 2.8 2.9 2.9
Total Imports 8.7 -7.1 12.1 1.4 2.4 4.0 2.8
GDP 1.9 1.6 0.7 1.7 3.0 2.8 2.9
UK Economic Outlook September 2015 Page 10
Chart 4.4 : Exports %
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
2010 2011 2012 2013 2014 2015 2016
Chart 4.5 : Imports %
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
2010 2011 2012 2013 2014 2015 2016
Chart 4.3 : Domestic Expenditure %
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2010 2011 2012 2013 2014 2015 2016

11. The Saturday Economist
Chapter 5 UK Economics Growth - Investment …
UK Economic Outlook September 2015 Page 11
• Investment grew by 8.6% in 2014. We
forecast growth of 4.49% in 2015, and 5.5%
in 2016.
• According to the latest ONS data, total
economy investment increased by 4.9% in
the second quarter.
• Investment in plant and machinery increased
by 6.0%. We are forecasting an increase of
5.0% in 2015 and 7.2% in 2016.
• We expect business investment to increase
by 5.3% in 2015 and by 6.2% in 2016
following growth of 8.0% in 2014.
•
• Our four year capital stock model suggests
growth of 2.7% in 2015 and 2.9% in 2016
after growth of 3.0% in 2014.
• By the beginning of 2015, capital stock
levels were be above the pre recession highs
of 2007-8. The Fixed Asset Turnover Ratio
will average 6.8 in the current year and 6.8 in
2016 compared to 6.7 in 2010.
Chart 5.1 Total Investment £m
50,000
60,000
70,000
80,000
90,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Chart 5.3 Machinery & Equipment £m
10,000
12,000
14,000
16,000
18,000
20,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Chart 5.2 Business Investment £m
20,000
30,000
40,000
50,000
60,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Chart 5.4 Four Year Capital Stock £m
150,000
187,500
225,000
262,500
300,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

12. The Saturday Economist
UK Economic Outlook September 2015 Page 12
Chapter 6 - UK trade in goods and services
… heading in the wrong direction.

13. The Saturday Economist
Chapter 6 UK Trade in goods and services
UK Economic Outlook September 2015 Page 13
Chart 6.1 : Trade in Goods
-150.0
-125.0
-100.0
-75.0
-50.0
-25.0
0.0
2005 2007 2009 2011 2013 2015
Chart 6.2 : Trade in Services
0.0
20.0
40.0
60.0
80.0
100.0
2005 2007 2009 2011 2013 2015
Chart 6.3 : Trade in Goods & Services
-50.0
-41.7
-33.3
-25.0
-16.7
-8.3
0.0
2005 2007 2009 2011 2013 2015
Balance Trade in Goods and Services £ billion
• We model exports as a function of world
trade and relative prices. A model in which
we find the demand terms dominant.
• We model imports as a function of domestic
demand, or total final expenditure and a
relative price term. Here the demand term is
dominant with relative price inelasticity.
There is little or no substitution effect.
• The trade in goods deficit increased to
£112.6 billion in 2013 and £121.2 in 2014
• We forecast the deficit to fall to £117.3
billion in 2015 and £117.4 billion in 2016.
• The trade in services surplus was £78.9
billion in 2013, an increase of 6% on the
prior year level.
• The trade in services surplus increased to
£85.9 billion in 2014. We forecast £91.4
billion in 2015 and £90.9 billion in 2016
• The surplus in services will continue to
offset the structural trade deficit in goods.
• We expect the oil dividend to improve the
deficit by around £6 billion in 2015.
• The trade in goods and services deficit
increased to £35.2 billion in 2014 compared
to £33.7 billion in the prior year.
• Our central forecast is for the overall deficit
to fall to £25.8 billion in 2015 rising to £26.5
billion in 2016.
• The ongoing deficit, measured at 2% of
GDP will not of itself, create a problem for
sterling. The current account deficit at
around 6% of GDP will however, present a
challenge to sterling and growth eventually.
… the trade deficit will continue to disappoint.

14. The Saturday Economist
Chapter 7 Labour Market Trends
UK Economic Outlook September 2015 Page 14
Chart 7.1 : Claimant Count 000
0
500
1,000
1,500
2,000
2005 2007 2009 2011 2013 2015
Chart 7.2 : LFS Count 000
1,000
1,500
2,000
2,500
3,000
2005 2007 2009 2011 2013 2015
Chart 7.3 : LFS Rate %
0.0
2.0
4.0
6.0
8.0
10.0
2005 2007 2009 2011 2013 2015
• The claimant count has fallen significantly
over the last twelve months as the economy
grew by 1.7% (2013) and 2.8% in 2014.
• The reduction was 370,000 through the year,
2014 ahead of most estimates and forecasts.
• Over the last three months to June 2015, the
claimant count has fallen by 38,000 to a level
of 748,100.
• We forecast a further fall in the claimant
count rate from an average 1.032 million in
2014 to 690,000 by the end of 2015.
• The LFS count unemployment in the second
quarter of 2015 is estimated to be 1.80
million.
• This is a reduction of over 400,00 over the
last twelve months.
• We expect levels to fall to 1.7 million by the
final quarter of 2015 and at least 1.5 million
by the final quarter of 2016.
• We expect the unemployment rate (LFS
basis) to fall from 5.8% at the end of 2014 to
5.0% by the end of 2015 and 4.9% by the
end of 2016. .
• The unemployment rate will average 6.3% in
2014, 5.5% in 2015 and 5.0% in 2016.
• The average rate, in the precession period
was just 5.5%.
• On current trends our forecasts suggests
“spare capacity” may be exhausted by the
second quarter of 2015 (LFS basis).
• The claimant count data however, suggests
the average unemployment rate of 3% in the
period 2005 - 2008 has already been
achieved. This will place additional pressure
on the pay round and earnings into 2015.

15. The Saturday Economist
Chapter 8 Government Borrowing
£ Billion 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Borrowing 153.5 134.8 113.4 119.7 98.5 88.2 69.5 43.1 24.3 6.4 -10.0
Debt 956.4 1,101.1 1,191.0 1,299.0 1,402.1 1,484 1,533 1,580 1,606 1,617 1,627.0
UK Economic Outlook September 2015 Page 15
Chart 8.1 : Borrowing £ billion
0
20
40
60
80
100
120
140
160
2009/10 2012/13 2015/16 2018/19
• Government borrowing in the twelve months
to March 2015 is estimated to be £88.2
billion compared to £98.5 billion in the prior
fiscal year.
• Following the release of the July 2015 data,
the government is on track to meet the
earlier OBR target of £75.3 in financial year
2014/5. The £69.5 billion target may be more
difficult.
• Total debt, is forecast to be just over £1.500
trillion at the end of the current financial year.
• Rising to £1.580 trillion at the end of
2016/17…
• … peaking at £1.627 trillion at the end of the
current forecast cycle 2019/20.
• As a % of GDP debt is estimated to be
80.4% at the end of 2014/15
• Falling to 80.3% in 2015/16, 79.21% in
2016/17 and 77.2% in 2017/18.
• Information derived from OBR Economic and
Fiscal Outlook July 2015. ONS data : Public
Sector Finances July 2015, released 18th August
2015.
Chart 8.2 : Total Debt £ billion
700
900
1,100
1,300
1,500
1,700
2009/10 2012/13 2015/16 2018/19
Chart 8.3 : Total Debt % GDP
40
50
60
70
80
90
2009/10 2012/13 2015/16 2018/19

16. The Saturday Economist
Chapter 9 Inflation Outlook
UK Economic Outlook September 2015 Page 16
Chart 9.1 : CPI Inflation
0.0
1.0
2.0
3.0
4.0
5.0
2005 2007 2009 2011 2013 2015
Chart 9.2 : Manufacturing Prices (O)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2005 2007 2009 2011 2013 2015
Chart 9.3 : Manufacturing Prices (I)
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
2005 2007 2009 2011 2013 2015
Chart 9.4 : Earnings
0.0
1.0
2.0
3.0
4.0
5.0
2005 2007 2009 2011 2013 2015
Chart 9.5 : Money Supply Narrow
0.0
2.0
4.0
6.0
8.0
10.0
2005 2007 2009 2011 2013 2015
Chart 9.6 : Money Supply M4
-5.0
0.0
5.0
10.0
15.0
2005 2007 2009 2011 2013 2015
We expect CPI inflation to average
0.5% in 2015 rising to 2.2% in 2016 …
Manufacturing prices - 0.2% in 2014,
falling by -0.6% in 2015 then up 2.8%.
Input prices fell by -6.6% 2014, we
forecast -9.3% in 2015 and +8.4%
Earnings are expected to average
1.4% in 2014 rising to 2.8% in 2015
and 3.5% in 2016.
Narrow money growth, notes and
coins increased by 4.3% in 2014. We
expect growth of 5.0% in 2015
slowing to 4.6% in 2016.
Broad money is expected to have
increased by 3.7% in 2014, rising to
4.0% in 2015 and 4.5% in 2016.

17. The Saturday Economist
Chapter 10 Interest rates - base rates and gilt yields
Table 10 - Base rates and Gilt Yields
2013 2014 2015 2016 2017
Base 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.50 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.00 2.25 2.50
Gilts 2.2 2.0 2.8 2.8 2.9 2.8 2.6 2.1 1.8 2.1 2.2 2.3 2.4 2.5 3.0 3.5 4.0 4.2 4.3 4.5
UK Economic Outlook September 2015 Page 17
We expect UK base rates to remain on hold through the
first half of 2015 there after rising to 0.75% by the end of
the year and 2% by the end of 2016.
Gilt yields have rallied from the sub 2% lows in 2013. We
expect yields to return to fair value 4.5% within the forecast
period by the end of 2017.
Chart 10.2 10 year Gilt Rates
0.00
1.00
2.00
3.00
4.00
5.00
2013 2014 2015 2016 2017
Chart 10.1 UK Base Rates
0.00
0.50
1.00
1.50
2.00
2.50
2013 2014 2015 2016 2017
HIgher event Base Case

18. The Saturday Economist
Appendix 1 Gross domestic product : expenditure at current market prices : ONS C1
UK Economic Outlook September 2015 Page 18

19. The Saturday Economist
Appendix 2 Gross domestic product : chained volume measure : ONS C2
UK Economic Outlook September 2015 Page 19

20. The Saturday Economist
Appendix 3 Gross domestic product : chained volume measure : ONS B1
UK Economic Outlook September 2015 Page 20

21. The Saturday Economist
Appendix 4 Exchange Rates, Interest Rates, Inflation and Labour Market Data
UK Economic Outlook September 2015 Page 21

22. The Saturday Economist
Appendix 5 Economic Forecast Overview
Outturn
2010
Outturn
2011
Outturn
2012
Outturn
2013
Outurn
2014
Forecast
2015
Forecast
2016
GDP Real Growth % 1.6 1.2 0.3 1.7 3.0 2.8 2.9
GDP Levels (2011 = 100) 98.3 100.0 100.7 102.2 105.3 108.2 111.4
GDP(E) at market prices £Bill 1,558.4 1,617.7 1,655.4 1,713.1 1,791.9 1,872.0 1,966.6
Household Consumption 0.5 -0.1 1.5 1.7 2.6 3.0 2.6
Business Investment 5.9 2.3 0.7 3.4 8.6 4.4 5.5
Government Consumption 0.0 0.0 2.3 -0.3 1.6 2.1 1.8
Domestic Expenditure 2.7 0.3 1.4 1.8 3.5 2.4 3.1
Exports 6.2 -1.2 7.6 1.5 0.5 4.2 2.7
Imports 8.7 -7.1 12.1 1.4 2.4 4.0 2.8
Net Trade % GDP current -2.4 -1.5 -2.1 -2.0 -2.0 -1.4 -1.5
Inflation
CPI 3.3 4.5 2.9 2.6 1.5 0.5 2.2
Labour Market
Employment Millions 29.0 29.2 29.5 29.9 30.6 31.1 31.5
Average Earnings 2.4 2.4 1.4 1.5 1.4 2.8 3.5
LFS unemployment rate 7.9 8.1 7.9 7.6 6.3 5.7 5.1
Claimant Count Millions 1.50 1.53 1.59 1.42 1.03 0.70 -
UK Economic Outlook September 2015 Page 22
The forecast is broadly consistent with the Second Estimate of GDP Q2 2015 released by the ONS on the 28th August 2015.

23. The Saturday Economist
UK Economic Outlook September 2015 Page 23
About the Author
John Ashcroft is founder and publisher of the Saturday Economist. He is
Chief Executive of pro.manchester, a member of the AGMA Business
Leadership Council and a visiting professor at Manchester Metropolitan
University Business School.
Educated at the London School of Economics, with a PhD in economics, his
specialist subjects include economics, strategy and social media.
Economics specialisms include the UK balance of payments, international
trade, interest rates and exchange rates modelling.
John Ashcroft (PhD) BSc.(Econ) FRSA, CBIM
Check out the web site, the Saturday Economist . com and sign up for FREE
weekly updates. Now mailing to over 50,000 business every week
John Ashcroft and Company experience worth sharing.
Join me on Twitter @jkaonline and LinkedIn John Ashcroft and Facebook.
The Saturday Economist
Where economics means
business and analysis makes
sense …

24. The Saturday Economist
UK Economic Outlook September 2015 Page 24