In 2014, growth and employment in the United Kingdom were relatively unaffected by the general weakening of global activity. The economy continued to grow briskly due to strong domestic demand. The labour market continues to perform robustly with employment expected to have grown in 2014, while the unemployment rate continues to fall. Inflation is on a downward trend, with the decline expected to continue in 2015, aided by the fall in energy prices. The budget deficit fell in 2014-15 and is estimated to fall again for 2016-17, while the government debt rate continues to increase. The current account deficit continues to widen and export share has continued to deteriorate, although at a less marked rate than previously.
The United Kingdom is experiencing macroeconomic imbalances, which require policy action and monitoring. In particular, risks related to the high level of household indebtedness, also linked to structural characteristics of the housing market, continue to deserve attention. The resilience of the economy and financial sector has increased. However, a shortage of housing will persist and is likely to underpin high house prices in the medium term and continue to leave the sector less resilient in the face of risks.
Read a complete analysis of the UK's economy in the country report 2015 [687 KB]
The Commission has made six country-specific recommendations to the United Kingdom to help it improve its economic performance, which have been approved by all EU member states. These are in the areas of: public finances; housing market; labour market, education and training; welfare reform and child care; financial sector; network industries.