On the surface, 2017 was a relatively quiet year for the UK economy.Output growth was weak but remained positive, while inflation accelerated slightly. However, the prospect of Brexit remains a major source of uncertainty for the immediate future. Thus, even a moderate slowdown in economic growth has been a significant cause for concern. It is likely that 2018 will give us a much better idea of the implications of Brexit for the medium-term performance of the UK economy.
Table 1 gives some basic descriptive statistics for the UK economy in the recent past. It shows that the growth rate of gross domestic product (GDP) has slowed, from a peak of just over 3% per annum in 2014, to about half that rate in 2017. It is tempting to attribute this slowdown to the decision to leave the European Union in June 2016. However, an examination of the quarterly data shown in Figure 1 suggests that the slowdown predates the Brexit decision by some considerable time.
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