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--Unless Specific Request, BOE No Early Look At August MPC
--ONS initiate GDP reporting switch from July
LONDON (MNI) - The Bank of England will be able to see the Office of
National Statistics' Q2 preliminary growth data ahead of the August policy
decision meeting, but only if it makes a specific request, citing public
interest. If no such request is made, Monetary Policy Committee will not have to
hand the data at the meet, the next likely possibility for a rate hike after
opting to hold fire in May.
Although regular pre-release access to the data has been ended, the Bank
can ask for data in exceptional circumstances where they would need to act or
make a decision in the public interest on the basis of the statistics, the ONS
say. This was the case in advance of the May monetary policy meet when the Bank
requested pre-release access to the ONS's Blue Book articles.
On July 10 the Office of National Statistics (ONS) will mark the beginning
of its new reporting method for GDP, switching to a rolling month basis from the
current calendar quarter basis. The data delivered on July 10 will cover GDP
growth over the three months to May.
The switch has been in the works since early 2016 when the ONS began
releasing data on a theme day basis. One of these such days was a 'short-term
economic indicators' theme day, published around the 10th of every month.
Currently, this includes UK industrial production, construction and trade but
absent services (roughly 80% of UK output) which is published two weeks later,
alongside the GDP data.
In early 2017 the ONS felt it could move the release of the services
figures alongside the other short-term economic indicators without compromising
the data, in doing so creating a new measure of GDP.
Currently, GDP is reported in three stages - a preliminary calendar quarter
estimate four weeks after the respective quarter-end, a second estimate at the
eight-week mark and a final estimate 13 weeks out. The new system produces only
two calendar quarter estimates and a rolling monthly 3m/3m figure.
The clear advantage the incoming system bares is that the first estimate
will have three full month's worth of data, as opposed to the two full months
and a forecast month as used under the current system. The quality of the data
will be further enhanced by that it will include shades of all the measures of
GDP -- output, expenditure and income -- as opposed to the current preliminary
estimate which is on the least comprehensive, output basis only.
The clear snag, however, is that this estimate will be less timely, delayed
by two weeks, with some market spectators clocking on to the fact the MPC
therefore won't have access to the early Q2 estimate at its August meet.
Instead, they will have the complete monthly growth rates for April and May
and a figure for the three months to May.
Speaking exclusively to MNI Market News, James Scruton, Head of Preliminary
GDP at the ONS, said the change would be for the better.
"The trade-offs are that we get a slightly less timely first estimate of
quarterly GDP and less data content in some of the components of GDP in the
first quarterly estimate. Overall, however, the first estimate of quarterly GDP
will be of far higher quality and our second estimate will be no different to
our current third estimate, both in terms of timing and data content," said
Internationally, the move sees the ONS move away from the way GDP is
reported in the U.S. and Europe and more towards how it is reported in Canada
but Scruton said the UK would remain one of the quickest to publish its GDP
"It's worth noting that, although our new first estimate is slightly less
timely, we're still one of the very quickest in the G7 to produce estimates of
GDP," said Scruton.
--MNI London Bureau; tel: +44 203-586-2225; email: email@example.com
--MNI London Bureau; +44 203-586-2226; email: firstname.lastname@example.org