gdp

Still tough going for the US

On the face of it, today’s GDP numbers confirmed the US economy ended last year on a decent footing (up 2.8% on annualised basis), even though growth fell short of expectations. However, the pattern of growth was perhaps a little more concerning. Inventory accumulation accounted for nearly three-quarters of the increase in output. Meanwhile, government consumption took nearly 1% from headline growth, with net exports also detracting, although only a small 0.1% negative contribution. Read more

27/01/2012 @ 14:13 GMT

More UK QE imminent

The Bank of England will face some tough choices next month when the next Inflation Report is published and the current round of quantitative easing (started in October) comes to an end. It was not wholly surprising to see the latest GDP data this morning showing a fall of 0.2% in the final quarter of 2011. This is not the first negative reading since the emergence from recession towards the end of 2009, but the last one (Q4-‘10) was put down to a number of one-off factors which were subsequently largely reversed. This time around, though even smaller, the decline is harder to dismiss. Read more

25/01/2012 @ 11:30 GMT

The grim UK economic reality

The UK Chancellor has used his autumn statement today to catch up with the economic reality. Yesterday, we had a taste of this from the OECD. Today, the independent Office for Budget Responsibility (OBR) did the same, putting growth at 0.7% for 2012 as a whole, a touch higher than the OECD’s forecast of 0.5%. That said, the Chancellor is remaining (relatively) bullish on the borrowing outlook, seeing the structural deficit eliminated within 5 years and debt/GDP ratio falling by the end of the current parliament in 2015. Read more

29/11/2011 @ 14:41 GMT

The painful fiscal journey of the UK

The UK Prime Minister yesterday paved the way for some downbeat economic forecasts when the Chancellor gives his autumn statement next week, with the downward revisions to the BoE’s growth profile of last week also adding to the more pessimistic outlook. But with seven months of the fiscal year gone, the budget numbers are not looking that bad. Indeed, excluding financial sector interventions, they are currently on course to just about meet the deficit target announced in the March budget for the current financial year. Receipts are running 5% higher vs. Read more

22/11/2011 @ 12:06 GMT

UK banking on more QE

The Bank of England tries to account for all possibilities in its quarterly inflation reports, but even it admits that there is no way it can quantify the worst case scenario for the eurozone and its impact on the UK economy. Once again, the Bank has been forced to reduce its projections for GDP growth, but there’s another interesting factor in the mix. For years the BoE has always produced its own ‘backcast’ of GDP, on the basis that official data under-estimated growth and that figures were likely to be revised higher. Read more

16/11/2011 @ 11:53 GMT

All about growth

There’s no doubting that eurozone politicians have a monumental task ahead on various fronts, but this is made all the more hard by the growth outlook. Ultimately, this is what budget sustainability hinges on. With no growth, it’s pretty difficult to pay down debt and if you push too hard for it, you just kill the economy even more. Yesterday’s GDP numbers in Portugal showed a 4th consecutive decline and whilst the French and German numbers this morning were in line with expectations, both are likely to slow significantly in the current quarter. Read more

15/11/2011 @ 08:09 GMT

A Bank full of bears

Not one or two but three MPC members have offered a very downbeat assessment of UK economic prospects in recent days. Adam Posen, the most dovish member of the policy-making committee, stated on Thursday that the economy is ‘cratering’ and that growth this year will be little more than 0.5%. Martin Weale claimed earlier this week that he would not be surprised if growth this quarter was negative. Read more

27/10/2011 @ 13:36 GMT

Are the storm clouds clearing in the US as well?

Europe’s creditable crisis response has almost been matched by an encouraging report out of the US suggesting that the worst may be behind them, at least in the short term. Two months back, there was heightened anxiety that America’s economy was lurching back into recession, not helped of course by the uncertainty generated by Europe’s problems. However, the provisional estimate of third quarter GDP growth of 2.5% was comfortably above the 1.3% recorded in Q2 and the 0.4% increase of Q1. Also, the consumer was on reasonable form and business investment continues to do very well. Read more

27/10/2011 @ 13:05 GMT

The disappointing shape of the UK economy

There is a plethora of details to be digested in the latest GDP data, not least given that it coincided with the annual revisions of the data. The upshot of these revisions is that the recession was deeper but shorter than previous thought, the peak-to-trough contraction now 7.1% vs. the 6.4% previous estimate. Read more

05/10/2011 @ 11:07 GMT

Bank of England edging towards QE?

The smattering of UK data released on Wednesday is not going to tip the balance for the Bank of England on Thursday, but does add to the recent slew that has further enhanced the slowdown story. The initial thinking from the ONS was that some of the softer tone to GDP figures seen in Q2 (0.2% QoQ) would dissipate, allowing for a fairly robust third quarter. The data up to now has done little to support this, with the latest production figures showing a 0.2% decline following July’s flat outturn. Read more

07/09/2011 @ 12:44 GMT

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