WIREDGOV

Our GDP Tracker indicates growth of 0.4 per cent in 2018 Q2 and 0.5 per cent in 2018 Q3.

Main points

• According to ONS, the UK economy expanded by 0.2 per cent over the three months to May. The outturn was exactly in line with the monthly GDP forecast that we published for the same period last month. Building on the official data, our monthly GDP Tracker suggests that growth is likely to have picked up to 0.4 per cent in the 3 months to June (Q2) which is close to our estimate of potential.
• The estimated increase in three month growth from May (0.2 per cent) to June (0.4 per cent) arises partly because the three month period to June is compared against output in the three month period to March which was impacted by adverse weather conditions and which has now dropped out of the frame of reference.
• Looking ahead into the third quarter, on current trends we expect GDP growth to pick-up a little to around 0.5 per cent. Recent evidence suggests that the manufacturing and construction sectors are recovering after a particularly weak start to the year, and the dominant services sector is set to grow slightly faster than in the recent past.

Amit Kara, Head of UK macroeconomic forecasting, said “The economy is showing clear signs of recovering from the unexpected slowdown in the first quarter. Taking the business surveys together, we believe that this recovery will be most noticeable in manufacturing and construction where output should start to increase once more. Overall though, we continue to expect the economy to grow broadly in line with its potential in the second and third quarters and not by enough to compensate for the slowdown in the first quarter.”

Our next full UK and global forecast will be published on 1st August. Our next GDP Tracker will be published on the 10th of August.

Please find the full commentary in attachment

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Notes for editors:

For further information please contact the NIESR Press Office or Paola Buonadonna on 020 7654 1923/ p.buonadonna@niesr.ac.uk

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