Business investment in the United Kingdom increased 0.4 percent in the first quarter of 2019, rebounding from a 0.9 percent fall in the previous period but below market expectations and a preliminary reading of a 0.5 percent gain, final figures showed. It is the first increase in business investment after four quarters of contraction, as buildings and structures; intellectual property products contributed positively while transport equipment partially offset the increase. Year-on-year, business investment went down 1.5 percent, after a 2.5 percent decrease in the last quarter of 2018 and compared to market forecasts and a preliminary 1.4 percent fall. The Bank of England, in its most recent Agents’ summary of business conditions, stated that “Brexit uncertainty as the main reason for holding back investment, with some choosing instead to build cash reserves or inventories. However, companies continued to invest in replacing essential kit, or in projects with a short pay-back period”. Private Investment in the United Kingdom averaged 1.03 percent from 1967 until 2019, reaching an all time high of 63.70 percent in the second quarter of 2005 and a record low of -33.70 percent in the third quarter of 2005.
Private Investment in the United Kingdom is expected to be -2.20 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Private Investment in the United Kingdom to stand at 0.10 in 12 months time. In the long-term, the United Kingdom Business Investment is projected to trend around 0.70 percent in 2020, according to our econometric models.