November GDP Tracker

Our monthly GDP Tracker suggests that the economy will expand by 0.4 per cent in the three months to October and by 0.4 per cent in the final quarter of this year.

Main points

• In our view, UK economic growth peaked in the third quarter of this year and will settle at a rate that is close to its post-crisis average in the final quarter.

• According to new ONS statistics published this morning, the UK economy expanded by 0.6 per cent in the third quarter (three months to September) after growing by 0.4 per cent in the second quarter (three months to June). The outturn was slightly lower than the 0.7 per cent monthly GDP forecast that we published last month for the same period and the error is partly because of back data revisions. Building on the official data, our monthly GDP Tracker suggests that the economy will expand by 0.4 in the final quarter of this year.  

• The apparent strength in third quarter growth masks a loss in momentum in industrial production as well as services output in the latter part of the third quarter. There are a number of factors at play, including Brexit-related uncertainty.  

Amit Kara, Head of UK macroeconomic forecasting, said “After rebounding from the weather-related disruption early this year to a pace that is considerably faster than our estimate of potential in the third quarter, GDP growth is on track to settle at 0.4 per cent in the final quarter of this year.  This lower growth rate is broadly in line with the post-crisis average. The outlook for growth is particularly uncertain, especially with the exit date from the European Union fast approaching and the terms of the future relationship yet to be settled.”

Please find the full commentary in attachment.