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NIESR Comment on ONS Preliminary Estimate of GDP
The ONS preliminary estimate of GDP indicates that the economy grew by 0.5% in 2016Q3 and 2.3% compared to the third quarter a year ago. The increase in output is entirely accounted for by the service sector with output falling in agriculture, production and construction. Other key points:
- GDP increased by 0.5% in 2016Q3, compared to a 0.7% increase in 2016Q2.
- GDP is now 8.2% above its pre-recession peak (2008Q1), but only 1.6% on a per capita basis
- Services sector output is now 12.1% above its 2008Q1 level. Manufacturing sector output is still 5.6% below, over the same period; the construction sector is 1.3% below.
- This is the last GDP estimate release before the Office for Budget Responsibility’s first post-referendum forecast on 23rd November, published alongside the Autumn Statement.
Simon Kirby, Head of Macroeconomic Modelling and Forecasting at NIESR, said “This is the first official estimate of GDP growth for the post-referendum period. It suggests reasonable economic momentum continued into the third quarter of this year, driven by robust consumer spending. We expect the economy to slow over the coming year, but it is unlikely that we will see further macroeconomic policy stimulus in the near term.”
This compares to NIESR’s recent estimate, based on our monthly GDP series and published on 7th October, of 0.4% quarterly growth in 2016Q3, available here.
For more information on NIESR’s estimates of the short and medium term impact of the UK’s decision to leave the EU, see here and for the long term impact see here. The Institute’s November forecasts, published in the National Institute Economic Review, will be released on 2nd November 2016.
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