UPDATE: MNI UK Data Forecasts: Q2 GDP, Services, Current Acc

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.

     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 fourteen analysts polled in an updated 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.

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

                         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                         14         11

Prior                        0.3        1.7

Barclays                     0.3        1.7

Capital Economics            0.3        1.7

Credit Suisse                0.3        N/A

Commerzbank                  0.3        N/A

Daiwa Capital Markets        0.3        1.7

HSBC                         0.3        1.7

IHS Global Insight           N/A        N/A

Investec                     0.3        1.7

JP Morgan                    0.3        1.7

LBBW                         0.3        N/A

Lloyds TSB                   0.3        1.7

Natixis                      0.3        1.7

Nomura                       0.3        1.7

Oxford Economics             0.3        1.7

RBC                          0.3        1.7

     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 and

possibly the most vital piece of data the Bank will use to decide whether a Bank

Rate hike in November was appropriate.

     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.

     After the robust showing last month (sales volumes were reported to have

come in 0.4% m/m in June), a taper in activity is expected to have been seen in

July. Month-on-month output was expected to have fallen back to 0.1% m/m in

July, for growth of 0.7% q/q. 

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

                         Jul       Jul

                          UK        UK

                    Index of  Index of

                    Services  Services

                       % M/M     % Q/Q

Date Out              29-Sep    29-Sep

Median                  0.10      0.70

Forecast High            0.1       0.7

Forecast Low            -0.2       0.6

Standard Deviation       0.1       0.1

Count                      6         5

Prior                    0.4       2.5

Capital Economics       -0.2       0.6

HSBC                     0.1       0.7

JP Morgan               -0.1       N/A

Lloyds TSB               0.1       0.7

Natixis                  N/A       0.6

Oxford Economics         0.1       0.7

Scotia                   0.1       N/A

     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.

     Meanwhile, the current account deficit is expected to narrow marginally

from stg16.9bn to stg15.8bn.

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

                    2017 Q2

                    Current

                    Account

                     stg bn

Date Out             29-Sep

Median                -15.8

Forecast High         -14.0

Forecast Low          -16.2

Standard Deviation      0.9

Count                     5

Prior                 -16.9

Capital Economics     -14.0

Investec              -15.7

Lloyds TSB            -16.0

Nomura                -16.2

Societe Generale      -15.8

     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.

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

[TOPICS: MTABLE,MABDT$,M$B$$$,M$E$$$]