Economic growth has stalled and there is around a one-in-four chance that the economy is already in a technical recession.

The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.

On the assumption that a no-deal Brexit is avoided, the economy is forecast to grow at around 1 per cent in 2019 and 2020 as uncertainty continues to hold back investment and productivity growth remains weak.

On the assumption of an orderly no-deal Brexit, the economy is forecast to stagnate, before starting to grow again in 2021.

Some loosening of the public purse appears inevitable and we expect public sector borrowing to rise above 2 per cent of GDP, with the possibility of substantial over-runs of the government's fiscal objectives in the event of a no-deal Brexit.

Recent trends in global industrial production and trade show activity stalling since late last year. The pace of service sector activity has remained steadier.

Tariff increases and trade disputes have contributed to the weakness in production and trade and have added uncertainty to the global economic outlook.

In response to weaker production activity and continued low inflation, central banks in many economies have either loosened monetary policy or positioned themselves to do so, which has been reflected in financial markets.

Taking these forces into account, we have reduced our forecast for global GDP growth this year slightly to 3¼ per cent. This is likely to be, by a small margin, the slowest annual growth for a decade. We expect output growth to show a slight pick-up in 2020 to 3½ per cent.

Gross Domestic Product (GDP) is often treated as shorthand for national economic well-being, even though it was never intended to be; it is a measure of (some) of the marketable output of the economy. This paper reviews several developments in measuring welfare beyond GDP that were recently presented at the Economic Statistics Centre of Excellence (ESCoE) annual conference in May 2019. The papers discussed fall into three broad areas. First, a significant amount of work has focused on incorporating information about the distribution of income, consumption and wealth in the national accounts. Second, the effects of digitisation and the growth of the internet highlight the potential value in measuring time use as a measure of welfare. Third, the digital revolution has spawned many new, often ‘free’ goods, the welfare consequences of which are difficult to measure. Other areas, such as government services, are also difficult to measure. Measuring economic welfare properly matters because it affects the decisions made by government and society. GDP does a reasonable job of measuring the marketable output of the economy (which remains important for some policies), but it should be downgraded; more attention should be given to measures that reflect both objective and subjective measures of well-being, and measures that better reflect the heterogeneity of peoples' experiences.

Only half of investment by firms is in physical capital, such as buildings and machinery. The other half is in intangible assets, such as branding, software and training. This has been true for the past two decades or more in the UK, but only if you step beyond the measures in the National Accounts, which include only some of the recognised intangible assets. This paper surveys ongoing work at the Office for National Statistics to develop measures of investment in intangible assets, using new insights and innovative approaches. In particular, this paper reviews developments in three areas: in-house branding investments, employer-funded training investments, and in-house investments in organisational capital. We reconsider some of the key assumptions made in the literature and propose alternative approaches to measurement. The paper concludes by considering implications of this work, and identifies some of the remaining gaps in the evidence base for measuring intangible assets.

When economists talk about ‘measurement’ they tend to refer to metrics that can capture changes in quantity, quality and distribution of goods and services. In this paper we argue that the digital transformation of the economy, particularly the rise of cloud computing as a general-purpose technology, can pose serious challenges to traditional concepts and practices of economic measurement. In the first part we show how quality-adjusted prices of cloud services have been falling rapidly over the past decade, which is currently not captured by the deflators used in official statistics. We then discuss how this enabled the spread of data-driven business models, while also lowering entry barriers to advanced production techniques such as artificial intelligence or robotic-process-automation. It is likely that these process innovations are not fully measured at present. A final challenge to measurement arises from the fragmentation of value chains across borders and increasing use of intangible intermediate inputs such as intellectual property and data. While digital technologies make it very easy for these types of inputs to be transferred within or between companies, existing economic statistics often fail to capture them at all.

Mobile phones have been central to ICT innovation since the introduction of the smartphone and constant-quality prices are a barometer of their economic impact. Official consumer price indices (CPIs) indicate that impact differs wildly across countries: for the 2008–18 period, average annual rates of mobile phone inflation range from no change to a 25 per cent decline among 12 key countries examined in this paper. Although evidence indicates certain fundamental factors are at play, mis-measurement may lead the spread in rates to be overstated. Examination of methods employed in CPI calculation, including quality adjustment and index formulas, illuminates but does not resolve the mystery.

Recent studies have shown a strong link between the complexity of economies and their economic development. There remain gaps in our understanding of the mechanisms underpinning these links, in part because they are difficult to analyse with highly aggregated, official data sources that do not capture the emergence of new industrial activities, a potential benefit from complexity. We seek to address some of these gaps by calculating two indices of economic complexity for functional local economies (Travel to Work Areas) in Great Britain, and explore their link with these locations’ economic performance. Seeking to gain a better understanding of the mechanism connecting economic complexity with economic performance, we create a measure of emergent technological activity in a location based on a combination of novel data sources including text from UK business websites and CrunchBase, a technology company directory, and study its link with economic complexity. Our results highlight the potential value of novel, unstructured data sources for the analysis of the links between economic complexity and regional economic development.

Global trade in the 21st century is characterised by complex value chains. Successful exporters usually rely on quality imports, and exported goods cross borders many times before reaching their final consumer. This poses challenges to economic measurement as well as policymaking because it becomes difficult to characterise the true interdependencies between countries. Currently, estimates of the share of imports from a trade partner destined for re-exports, and the share used in the domestic economy, are crude at best. We develop a novel approach to estimate these shares. Instead of assigning imports for re-exports proportionally across all source countries, we consider the origin of imports for each trader who re-exports goods. The method is illustrated for the Netherlands, a major re-exporter. We find that non-European member states export 10 billion euros of commodities to the Netherlands that are destined for re-export to the United Kingdom. We also find that the goods trade deficit between the Netherlands and the United States is drastically reduced when taking re-export flows into account.