UK Q3 2017 GDP Preliminary Estimate +0.4%

worldtraveller

UK GDP up by 0.4% during Q3 (July to September) 2017:

Main points

• UK gross domestic product (GDP) was estimated to have increased by 0.4% in Quarter 3 (July to Sept) 2017, a similar rate of growth to the previous two quarters.
• Services increased by 0.4%, the same rate as Quarter 2 (Apr to June) 2017 and remains the largest contributor to GDP growth, with a strong performance in computer programming, motor trades and retail trade.
• Manufacturing returned to growth after a weak Quarter 2 2017, increasing by 1.0% in Quarter 3 2017.
• Construction has contracted for the second quarter in a row, although the industry still remains well above its pre-downturn peak.
• GDP per head was estimated to have increased by 0.3% during Quarter 3 2017.

ONS

Eric_the_half_a_bee

"Despite Brexit fears"

michaels

I guess 0.4 rather than 0.2 makes the Nov base rate hike a done deal

HAMISH_MCTAVISH

Another disappointing result - with growth well down on our pre-Brexit vote rate and with the EU economies now powering ahead.

We really should be doing better....

the UK economy should be riding high on the back of the on-going global upswing. Uncertainty from Brexit is weighing on firm and household confidence. As neighbouring Eurozone growth accelerates to a decade high of 2.2% this year, UK growth looks set to slow to a modest 1.6% – well below its pre-Brexit potential rate of 2.2%. After managing one of the strongest post-Lehman recoveries of all advanced economies, the UK growth rate would probably be nearer 2.5% this year if it weren’t for Brexit

https://www.ft.com/content/549bc580-d322-3c36-87e4-bfe3331384fe

cogito

HAMISH_MCTAVISH wrote: »

Another disappointing result - with growth well down on our pre-Brexit vote rate and with the EU economies now powering ahead.

We really should be doing better....

https://www.ft.com/content/549bc580-d322-3c36-87e4-bfe3331384fe

You are so predictable, HAMISH. I knew what your post would say before I even read it.

If the economy was growing at 5%, you would complain that it was overheating and blame it on brexit.

mayonnaise

michaels wrote: »

I guess 0.4 rather than 0.2 makes the Nov base rate hike a done deal

Can someone smarter than me explain the case for an interest rate rise while the economy is experiencing aenemic growth and real wages are sliding?

Thrugelmir

mayonnaise wrote: »

Can someone smarter than me explain the case for an interest rate rise while the economy is experiencing aenemic growth and real wages are sliding?

High levels of inflation and another debt bubble building.

Low interest rates benefit those that can afford to borrow. Not everyone as a whole. Nor savers or those that are more prudent.

tracey3596

mayonnaise wrote: »

Can someone smarter than me explain the case for an interest rate rise while the economy is experiencing aenemic growth and real wages are sliding?

Plenty if you look, it's not difficult. As one example Hamish Muress, currency analyst at OFX describes it thus:

" ....it should signal a move out of ‘emergency mode’ for the Bank of England, providing the Bank with the ability to lower rates once again, should the economy need a boost around the Brexit deadline in 2019."

http://uk.reuters.com/article/uk-britain-markets-gdp/sterling-climbs-as-strong-gdp-data-bolsters-boe-hike-bets-idUKKBN1CU0Y4

Filo25

Thrugelmir wrote: »

High levels of inflation and another debt bubble building.

Low interest rates benefit those that can afford to borrow. Not everyone as a whole. Nor savers or those that are more prudent.

Debt growth appears to be slowing though and the decline in real wages doesn't point to an inflationary spiral developing.

I agree that the BoE is almost certainly going to raise rates in November, I'm just not entirely convinced it should, that said a 0.25% rise isn't going to make much of a difference one way or another, beyond maybe buying the BoE a bit of credibility in the markets.

I'm still not seeing a path to ongoing rises in the near future at present though.

Filo25

tracey3596 wrote: »

Plenty if you look, it's not difficult. As one example Hamish Muress, currency analyst at OFX describes it thus:

http://uk.reuters.com/article/uk-britain-markets-gdp/sterling-climbs-as-strong-gdp-data-bolsters-boe-hike-bets-idUKKBN1CU0Y4

If Brexit talks go badly the economy will need a boost long before March 2019, if WTO looks likely you will start to see impacts well before then.

Hopefully the current optimism that we can progress to Phase 2 in December will be well placed.

Eric_the_half_a_bee

mayonnaise wrote: »

Can someone smarter than me explain the case for an interest rate rise while the economy is experiencing aenemic growth and real wages are sliding?

If you read the MPC minutes carefully, you will see that they are expecting wage growth to pick up over the coming months. From the September minutes:

"The unemployment rate has continued to decline, to 4.3%, its lowest in over 40 years and a little lower than forecast in August. Survey indicators are consistent with continued strength in employment growth. Evidence continues to accumulate that the rate of potential supply growth has slowed in recent years. Overall, the latest indicators are consistent with UK demand growing a little in excess of this diminished rate of potential supply growth, and the continued erosion of what is now a fairly limited degree of spare capacity. Underlying pay growth has shown some signs of recovery, albeit remaining modest...

Recent developments suggest that remaining spare capacity in the economy is being absorbed a little more
rapidly than expected at the time of the August Report, and that inflation remains likely to overshoot the 2%
target over the next three years. "

http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2017/sep.pdf