We project that the output of the economy in the three months ending in March was 0.5% higher than in the previous three months. This follows a revised figure of 0.5% for the three months ending in February. Underlying this change are estimates of growth for both public and private sector services which are lower than the rates prevailing late last year. This press release is produced ahead of the interest rate decision. However our view is that, despite the deceleration of economic growth, an interest rate increase is needed because of the presence of underlying inflationary pressure in the economy. Our track record in producing early estimates of GDP suggests that our projection for the most recent three-month period has a standard error of 0.14% point when compared to the first estimate produced by the Office for National Statistics. This comparison can be made only for complete calendar quarters. Outside calendar quarters the figures are less reliable than this. A paper describing the methodology used to produce the data was published in the February 2005 volume of the Economic Journal. From April until October 2006 our estimates were computed using the Index of Services published by ONS. However this monthly series shows considerable volatility which has caused us some problems in estimating GDP. From our November 2006 press release we have therefore reverted to using a model of private services output based on indicator variables. This means that, while all our figures for calendar quarters are fully coherent with ONS data, our estimates of monthly private service output are not. The series can be thought of as indicating the underlying value of the ONS series.
For more information please telephone Martin Weale on 020 7654 1945.
Contents available to Premium GDP Estimates Subscribers:
NIESR uses statistical projection techniques to project UK GDP one month ahead, giving NIESR's highly respected monthly UK GDP estimates. We also estimate economic growth in the three months ending in the month just ended. This means that each calendar quarter an estimate of quarterly growth is produced about 3 weeks ahead of the Office of National Statistics. The importance of the NIESR GDP estimates is well recognised, being widely reported in the press. The minutes of the Monetary Policy Committee sometimes refer to them as one of the factors which influence interest rate decisions. Four summary tables are available to Premium GDP Estimates Subscribers, as well as a full monthly set of time series:
Table 1: Summary table of quarterly growth rates showing monthly data, 3 months ending in that month, and quarterly growth (% per quarter). All contain figures for industry & GDP.
Table 2: Output by sector (industry, agriculture, construction, private services, public services, GDP(B) (calculated at prices excluding taxes and subsidies), GDP
Table 3: Output in quarter ending in month shown by sector (as above)
Table 4: Growth in quarter ending in month shown over previous quarter (% at annual rate) by sector (as above)
For more information and pricing on Premium GDP Estimates Subscription, please contact the External Relations Officer, quoting reference GDPweb: tel: +44 (0)20 7654 1931, email: enquiries [at] niesr.ac.uk , post: External Relations Officer, NIESR, 2 Dean Trench Street, Smith Square, London, UK, SW1P 3HE