MNI 5 Things: August UK GDP Flat; 3M/3M Boosted By Higher July

By Laurie Laird, Jamie Satchithanantham and Jai Lakhani

     LONDON (MNI) - UK data released Wednesday showed rolling 3-month/3-month

GDP rose 0.7% in August. The following are the main points from the release.

     --Whilst the rolling 3M/3M GDP growth in August hit 0.7%, it rode on the

coattails of a strong July. Nonetheless, should September replicate August's

flat reading, Q3 GDP would be 0.6% -- the highest q/q growth since Q4 2016.

     --Services were flat on the month in August however temporary factors

created a false dawn in the sector. Had it not been for growth in the motor

trade industry of 1.7% in August -- boosted temporarily by firms looking to beat

new emissions testing deadlines in September -- the sector would have registered

negative growth.

     --Construction grew by 2.9% in the three months to August. However, the

growth masks underlying weakness in new work and repair & maintenance which fell

0.8% and 0.6% respectively on the month. Construction output was down 0.5% m/m

in August. Previous MNI analysis has eluded to new order growth weakness in the

sector.

     --Production was the only output component to register growth in August,

boosted by utilities and generation. The sharp drop in average temperatures

between July and August, around 2 degrees Celsius, facilitated the rise in

energy output.

     --The trade deficit could balloon to stg4.3 bn in September, a gap not seen

in two years, and leave the trade balance steady between Q2 and Q3.

     --Bonus: In the 12 months to August 2018, the visible trade deficit with

the EU narrowed by stg4.5 bn, compared to a stg0.5bn narrowing with countries

outside of the EU.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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