UK GDP Revised Lower As Electricy Output Slows

UK GDP was revised lower as with manufacturing and electricity generation notably weaker than previously estimated, the Office for National Statistics said Thursday. The data was revised lower generally over the last year, with Q3 2022 now seeing a contract ion on 0.3% q/q and year-on-year growth revised to +1.9%, down from the earlier estimate of +2.4%.

• A slowdown in demand for energy from both households and businesses as prices spiked higher since the start of the Ukraine war were seen as a key driver of the fall in electricity demand and subsequent sharp fall in output and the revised data will be seen by the Bank of England that households have reined back on spending quicker than perhaps believed.
• The level of real GDP in Quarter 3 2022 is now estimated to be 0.8% below where it was pre-covid in Q4 2019, downwardly revised from the previous estimate of 0.4% below.
• The implied GDP deflator rose by an upwardly revised 6.4% in the year to Quarter 3 2022, primarily driven by an 9.2% increase in the implied price of household.
• Production output fell by 2.5% in Q3, revised from a first estimate fall of 1.5%. Production output has now contracted for five consecutive quarters since Q3 2021.There have been broad-based downward revisions to production industries output across quarters since the start of 2021, particularly in the energy sub-sector.
• Electricity, gas, steam and air conditioning supply is now 2.7% below its pre-coronavirus levels, revised from being 6.3% above its pre-coronavirus levels.
• These downward revisions to energy are driven by revised data for the volume of energy supplied, which might reflect a bigger impact of rising prices on energy consumption in Q2 and Q3 2022.