MNI UK Preliminary Data Forecasts: Q2 GDP - Final Estimate

By Jamie Satchithanantham

     LONDON (MNI) - Its a data intensive week ahead in the UK, with the bulk

concentrated on Friday. Perhaps the most watched of these will be the Office of

National Statistic's publication of its final GDP estimate for Q2. As this is

the final estimate it will be accompanied by the quarterly National Accounts

and, as usual, the monthly Index of Services report. 

     Friday also sees the release of the September GfK Consumer Sentiment,

Nationwide House Price Reports and the Bank of England's August Money and Credit

report.  

     Last month, negligible revisions to both the Index of Production and

Construction series meant that GDP growth was confirmed at 0.3% q/q and 1.7%

y/y. This is expected to hold true this month too.

     Of the seven analysts polled in a preliminary MNI survey, shown in the

table below, all see GDP growth coming in unchanged from its second estimate

which in itself was unchanged from the preliminary estimate made in July. 

     That the ONS is currently compiling the 2017 Blue Book, due for release

next month, however, could provide some room for revision in either direction.  

     Absent this, focus will divert to the Index of Services print which for

July will provide the first meaningful glimpse of how GDP fared in Q3. 

     The services sector accounts for roughly 80% of UK output and although July

data for production, manufacturing and construction have already been released,

at 13% of UK output the trio's influence over GDP is dwarfed by the services

data. 

     Retail sales came in strong in August, so much so that a 2.9% m/m fall

would be needed for the sector to exert a negative effect on Q3 GDP, thus

already pointing to a healthier picture. Car purchases, however, which have been

soft since the turn of the year, appear to have remained subdued and could drag

on growth.  

     As for the National Accounts, observers will be looking to the household

savings rate which fell to a record low 1.7% in Q1. Despite squeezed incomes and

heightened uncertainty consumers were resilient and chose to eat into savings at

the start of the year but given consumer sentiment has receded somewhat in

recent months there may be scope for the ratio to pick up as consumers turn a

little bit more cautious. 

     In addition, Investec suggest upward pressure on the savings ratio could

emanate from higher estimates of dividend income from self-employment while

Oxford Economics see a an upward revision on the cards from a proposed change in

the way household incomes are calculated.  

----------------------------------------

                      2017 Q2    2017 Q2

                    Final GDP  Final GDP

                     Estimate   Estimate

                         rate       rate

                        % Q/Q      % Y/Y

Date Out               29-Sep     29-Sep

Median                   0.30       1.70

Forecast High             0.3        1.7

Forecast Low              0.3        1.7

Standard Deviation        0.0        0.0

Count                       7          4

Prior                     0.3        1.7

Credit Suisse             0.3        N/A

Commerzbank               0.3        N/A

Investec                  0.3        1.7

LBBW                      0.3        N/A

Nomura                    0.3        1.7

Oxford Economics          0.3        1.7

RBC                       0.3        1.7

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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