MNI Data Team - BoE Likely to Revise Down...>

UK DATA: MNI Data Team - BoE Likely to Revise Down 2018 GDP Growth On

Disappointing Q1

Lower UK GDP growth in Q1 (0.1% vs 0.4% BOE MPC estimate) will likely mean the

MPC will revise down its 2018 GDP growth forecast in next Thursday's May

Quarterly Inflation Report. Feb's QIR placed 2018 annual growth at 1.8% (2017

saw 1.9%). Assuming no revision to the Q1 data, MNI calculates (wildly

optimistic) growth of 0.75% q/q over each of the three remaining quarters would

be needed to secure the 1.8% projection. The ONS has, however, a tendency to

revise Q1 growth up in the long run, nudging its initial Q1 estimate up by

0.05pp between 1993-2014. If applied to this year's first estimate of Q1 growth,

the required q/q growth rate would fall marginally to 0.71% q/q. In 2010 Q1,

when the UK was last hit by extreme weather, Q1 GDP was revised up 0.3pp. If the

same revision is applied to this year's Q1 data, the required quarterly rate

would drop further to 0.54% -- still fairly punchy versus recent results.