WIREDGOV

Our monthly estimates of GDP suggest that output grew by 0.3 per cent in the three months ending in June 2017 after growth of 0.3 per cent in the three months ending in May 2017: the economy continues to grow below its long run trend of 0.6 percent.

Rebecca Piggott, Research Fellow at NIESR, said “We estimate that output grew by 0.3 per cent in the second quarter of 2017. Growth in services has offset a contraction in industrial output, yet remains subdued when compared with last year. The saving ratio reached an historic low of 1.7 per cent in the first quarter of this year, implying that, so far, households have reduced their saving to cushion the effect of falling real incomes on consumption as inflation rises”. 

NIESR’s latest quarterly forecast (published 10th May 2017) projected GDP growth of 1.7 per cent per annum in 2017 and 1.9 per cent in 2018 (see here 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 0.224% point (for the full sample period 1999Q3-2015Q4) when compared to the first estimate produced by the ONS. For the period 2008Q1 to 2015Q4 the RMSE is 0.290% 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 0.188% point, and for 2008Q1 to 2015Q4 the RMSE is 0.231% point. These comparisons can be made only for complete calendar quarters. Outside calendar quarters the figures are less reliable than this.

Click here for full press release