MNI DATA ANALYSIS: UK Nov GDP Up On Retail; To Rise in Q4>

-UK Nov GDP +0.2% m/m, +0.3% 3m/3m vs +0.4% Aug-Oct

-UK Nov Services +0.3% m/m; +0.3% 3m/3m

By Laurie Laird and Jai Lakhani

     London (MNI) - UK economic growth outpaced expectations in the 

month of November, lifted by strong retailing activity, leaving the 

economy poised to record a modest expansion in the final quarter of the 

year. 

     GDP expanded by 0.2% in the penultimate month of the year, above 

the MNI median forecast of a 0.1% rise, after rising by 0.1% in October. 

     That took growth in the three months to November to 0.3%, matching 

the MNI median, down from 0.4% in the previous three months and a 0.6% 

gain in the third quarter. 

     That means GDP could slump by 0.6% in the final month of 2018 for 

the economy and leave fourth quarter growth on level pegging with the 

previous three months. 

     Members of the Bank of England's Monetary Policy Committee expect 

growth to moderate to a 0.2% pace in the fourth quarter, according to 

minutes of the MPC meeting in December, down from the 0.3% forecast 

contained in the November Inflation Report. 

     However, if GDP growth in December matches the November outturn of 

0.2% growth, GDP will expand by 0.3% in the fourth quarter, exceeding 

the Bank's expectations. 

     Over the year to November, the economy expanded by 1.5%, above the 

MNI median of 1.3%, matching the year-on-year growth rate recorded in 

the month of October. 

     The dominant service sector did most of the economic heavy lifting, 

expanding by 0.3% in November, above the MNI median forecast of a 0.1% 

gain, up from 0.2% in October. Retailing, boosted by Black Friday 

promotions, accounted for much of the strength. Services, which account 

for 79.6% of total output, contributed 0.23 percentage points to monthly 

GDP growth. 

     Services expanded by 0.3% in the three months to November, above 

the MNI median forecast of 0.2%, matching the 0.3% gain recorded between 

August and October.  The sector accounted for 0.24 percentage points of 

total growth in the latest three months, with accountancy services 

providing much of the strength. 

     The manufacturing sector contracted for the fifth straight month, 

the longest stretch since the six months ending in February of 2009. 

However, motor vehicle production was flat, ending two straight months 

of steep declines. A decline in pharmaceutical production accounted for 

much of the weakness. 

     Total factory output fell by 0.3% in November, falling short of the 

MNI median forecast of a 0.4% month-on-month improvement. Over the three 

months to November, manufacturing output declined by 0.8%, after a 0.2% 

slump in the three months to October. 

     Over the three months to November, total industrial output also 

declined by 0.8%, compared to a 0.1% gain over the previous three 

months. 

     Meanwhile, construction output rose by 0.6% in November, exceeding 

the MNI median forecast of a 0.2% monthly gain and a 2.5% annual rise.  

Construction, which comprises 6.0% of output, added 0.04 percentage 

points to total monthly growth. 

     Over the three months to November, construction output expanded by 

2.1%, up from a 1.6% gain in the previous three months, contributing 

0.13 percentage points to growth between September and November. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]