July 2015 GDP Estimates
Our monthly estimates of GDP suggest that output grew by 0.7 per cent in the three months ending in June after growth of 0.6 per cent in the three months ending in May 2015. This implies that the economy has expanded by 2.7 per cent in the last 12 months.*
This robust rate of growth exceeds that of the economy’s potential over the same period, and so suggests spare capacity continues to be absorbed. Consistent with this, we expect the Bank of England to begin increasing Bank Rate in early 2016, most likely coinciding with the February Inflation Report. Of course, risks to this outlook persist, not least the ongoing Euro Area saga.
* NIESR’s latest quarterly forecast (published 6th May 2015) projects GDP growth of 2.5 per cent per annum in 2015 and 2.4 per cent in 2016 (see http://niesr.ac.uk/media for the associated press release).
For more information, please see the file download.