December 2020 GDP Tracker

Publication date: 10 Dec 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): MacQueen, R

October Cloud and November Rain

Main points

  • The morning’s ONS estimates suggest that the UK economy grew by 0.4 per cent in October, as the economic recovery from the early stages of Covid-19 slowed. This is largely in line with what we expected in our November GDP Tracker
  • Based on survey data for November and NIESR judgement we estimate that economic activity fell by some 9.3 per cent: as expected, a smaller drop than during the full lockdown in Spring 2020
  • Our outlook for the fourth quarter is for a 1.5 per cent decline in activity, following 9.7 per cent month-on-month growth in December
  • We now expect the level of GDP at the end of the 2020 to be some 8.5 per cent lower than it was at the end of 2019

 

“Today’s ONS data show that the fourth quarter got off to a ponderous start even before the second lockdown in England was imposed.  Survey data suggest that although the economic impact of the second lockdown in November was smaller than the first, it does seem more likely than not that the final quarter of the year will show little or no overall growth in GDP with the recovery shuddering to a halt.  While the rollout of the vaccine offers some positive momentum, the final act of Brexit is likely to offset that in the early months of 2021.”

Rory Macqueen, NIESR Principal Economist - Macroeconomic Modelling and Forecasting

Please find the full analysis in the document attached