28 Apr 2015
First estimate of UK GDP to show recovery slowed in Q1 - Capital Economics
FXStreet (Bali) - Samuel Tombs, Economist at Capital Economics, expects the first estimate of UK GDP (09.30 BST) to show that the recovery slowed in Q1.
Key Quotes
"The first estimate of GDP (09.30 BST) seems likely to show that the recovery slowed in Q1 and may therefore put the coalition parties on the back foot just nine days before the general election. Granted, the business surveys have been upbeat."
"However, the latest official output figures in the industrial, construction and services sectors of the economy all fell in January. And with construction output having fallen further and industrial production barely rising at all in February, growth in services output would have had to have surged in February and March to have prevented overall GDP growth from slowing in Q1."
"We forecast a slowdown in quarterly GDP growth from 0.6% in Q4 to 0.4% in Q1 – but there is a risk of an even weaker number. Nonetheless, we continue to think that GDP could grow by about 3% in 2015. Households’ incomes are on track for their strongest growth since 2006 this year. Meanwhile, borrowing costs are falling and monetary stimulus appears to have revived the euro-zone economy."
Key Quotes
"The first estimate of GDP (09.30 BST) seems likely to show that the recovery slowed in Q1 and may therefore put the coalition parties on the back foot just nine days before the general election. Granted, the business surveys have been upbeat."
"However, the latest official output figures in the industrial, construction and services sectors of the economy all fell in January. And with construction output having fallen further and industrial production barely rising at all in February, growth in services output would have had to have surged in February and March to have prevented overall GDP growth from slowing in Q1."
"We forecast a slowdown in quarterly GDP growth from 0.6% in Q4 to 0.4% in Q1 – but there is a risk of an even weaker number. Nonetheless, we continue to think that GDP could grow by about 3% in 2015. Households’ incomes are on track for their strongest growth since 2006 this year. Meanwhile, borrowing costs are falling and monetary stimulus appears to have revived the euro-zone economy."