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NIESR - June 2015 GDP Estimates: GDP Growth of 0.6% in three months to May

Our monthly estimates of GDP suggest that output grew by 0.6 per cent in the three months ending in May after growth of 0.5 per cent in the three months ending in April 2015. These estimates are consistent with a rebound of economic growth in the second quarter of this year. For the year as a whole, we forecast GDP growth of 2.5 per cent per annum*. We continue to expect the MPC to start raising interest rates in the first quarter of 2016.

* 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).

Technical notes: Our track record in producing early estimates of GDP suggests that our projection for the most recent three-month period has a root mean squared error (RMSE) of 0.234% point (for the full sample period 1999Q3-2013Q4) when compared to the first estimate produced by the ONS. For the period 2008Q1 to 2013Q4 the RMSE is 0.334% point. The impact of the adverse weather in 2010Q4 is a noticeable outlier. Excluding 2010Q4 from the analysis, the RMSE for the full sample period is 0.195% point, and for 2008Q1 to 2013Q4 the RMSE is 0.258% point. These comparisons 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:

Mitchell, J. Smith, R. J., Weale, M. R., Wright, S. and Salazar, E. L. (2005) ‘An Indicator of Monthly GDP and an Early Estimate of Quarterly GDP Growth’, Economic Journal, No. 551, pp. F108-F129.

A paper describing the methodology used to produce the data for the inter-war period was published in the October 2012 volume of Explorations in Economic History:

Mitchell, J., Solomou, S. and Weale, M. (2012) ‘Monthly GDP estimates for inter-war Britain’,Explorations in Economic History, Vol. 49, No. 4, pp. 543-556.

Notes for editors: For further information please contact the NIESR Press Office or Brooke Hollingshead on 020 7654 1923/ b.hollingshead@niesr.ac.uk

National Institute of Economic and Social Research

2 Dean Trench Street
Smith Square
London, SW1P 3HE
United Kingdom

Switchboard Telephone Number: 020 7222 7665

Website: http://www.niesr.ac.uk

 

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