MNI DATA IMPACT: Services Bounce Leaves UK GDP In Black>

By Laurie Laird and Irene Prihoda

     LONDON (MNI) - The UK economy is set to avoid a technical 

recession, with GDP poised to expand in the third quarter, despite a 

weak showing in the month of August. 

     The following are the key points from August GDP and trade data 

released by the Office for National Statistics on Thursday. 

     - Gross domestic product rose by 0.3% in the three months to 

August, much higher than forecast, despite a larger-than-expected 0.1% 

fall between July and August. 

     - The August outturn, coupled with a fairly robust performance in 

July, leaves the economy poised for a modest expansion in Q3. Total 

output call fall by 1.4% in September and leave Q3 GDP in the black. 

Output has not fallen by such a large amount since June of 2012. 

     - Services were flat in August, outpacing expectations, but 

increased by 0.4% in the three months to August, the fastest pace since 

the first quarter, adding 0.36 percentage points to total growth. Film 

and television production accounted for much the strength, rising by 

1.4% in the three months to August.

     - Financial services rebounded, rising by 0.8% in the latest three 

months, the fastest pace since April 2018. The sector increased by 0.2% 

in the month of August, the fourth straight rise after 14 consecutive 

months of decline. 

     - Wholesale and retail trading increased by 0.2% in the three 

months to August, suggesting enduring consumer strength, although the 

sector recorded no growth between July and August. 

     - Manufacturing output fell by 0.6% m/m in contrast to markets 

penciling in a 0.2% uptick, as the expected positive contribution from 

still-open car manufacturing plants fail to materialize.  

     - The trade deficit narrowed slightly to Stg1.546 billion in 

August, although tjhe July gap was revised sharply higher to Stg1.681 

from the originally-reported Stg219 million. Over Q2, the trade gap was 

revised to Stg11.394 billion from the previously-estimated Stg6.874 

billion. National Statistics officials would not comment on whether 

trade could exert a less positive influence on Q2 GDP in later 

iterations of the data. 

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

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