UK GDP QQ (Q3) -0.1% vs Exp. 0.0% (prev. 0.0%); UK GDP is now estimated to shown no growth in Q2 2023 (prelim. 0.2%)

• In output terms, there was a 0.2% fall in the services sector in the latest quarter, which offset a 0.4% increase in construction output and a 0.1% increase in the production sector.


• Real households' disposable income (RHDI) is estimated to have grown by 0.4% following growth of 2.3% in Quarter 2 2023.


• The household saving ratio is estimated at 10.1% in the latest quarter, up from 9.5% in Quarter 2 2023 because of an increase in income outweighing a slight increase in expenditure.

via ONS

Analysis details (07:27)

• An unwelcome set of revisions for the UK Government and a series which may factor into thinking on the BoE in terms of if the three MPC hawks continue dissenting and when Dhingra begins voting for a cut. Downward revision to Q3 GDP takes it into negative territory Q/Q with an accompanying revision to Q2 to 0.00% (prelim. 0.2%).


• Q3's number was hit by a 0.2% fall in the services sector, which offset upside on construction and production. Potentially of note for the BoE on the inflationary front, RHDI (real household disposable income) came in at 0.4% growth, markedly down from the prior rate of 2.3%.


• Looking ahead, and as a reminder, the November BoE MPR stated that "GDP is expected to grow by 0.1% in Q4, also weaker than projected previously.". However, if October's soft start proves correct then the UK could see itself in a technical recession upon release of the Q4 figure, due 15th February.

22 Dec 2023 - 07:00- Fixed IncomeData- Source: Reuters