UPDATE: UK Data Forecasts: Q2 GDP - Second Estimate, June IOS

By Jamie Satchithanantham

     LONDON (MNI) - UK growth is seen being confirmed as coming in modestly

higher, with nine of the ten analysts polled by MNI expecting the second

estimate of second quarter GDP to come in unchanged at 0.3% q/q.

     Despite revisions to the June industrial production (revised up from +0.1%

m/m to +0.5% m/m) and construction (revised down from +1.8% to -0.1% m/m), the

data published since the initial GDP estimate was published last month, these

are not seen to be significant enough to change the headline figures.

     As such, the focus on Thursday will fall on the expenditure breakdown of

the GDP numbers.

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

                          2017 Q2     2017 Q2

                       Second GDP  Second GDP

                         Estimate    Estimate

                             rate        rate

                            % Q/Q       % Y/Y

Date Out                   24-Aug      24-Aug

Median                       0.30        1.70

Forecast High                 0.3         1.7

Forecast Low                  0.2         1.7

Standard Deviation            0.0         0.0

Count                          18          12

Prior                         0.2         2.0

Bayern                        0.3         N/A

Barclays                      0.3         1.7

Berenberg                     0.3         N/A

Capital Economics             0.3         1.7

Commerzbank                   0.3         N/A

Daiwa Capital Markets         0.3         1.7

HSBC                          0.3         1.7

ING                           0.3         1.7

Investec                      0.3         1.7

JP Morgan                     0.3         1.7

LBBW                          0.2         N/A

Lloyds TSB                    0.3         1.7

Nomura                        0.3         1.7

Oxford Economics              0.3         1.7

Pantheon                      0.3         N/A

RBC                           0.3         1.7

Standard Chartered            0.3         N/A

Societe Generale              0.3         1.7

     The mutual thinking among analysts was that there would not be any material

affect from the revisions made to the income components that comprise GDP.   

     Despite revisions to the June industrial production (revised up from +0.1%

m/m to +0.5% m/m) and construction (revised down from +1.8%m/m to -0.1% m/m)

figures, made after the initial GDP estimate was published last month, these are

not seen to be significant enough to change the headline figures.

     What could force a change, however, is a deviation from the ONS' forecast

for services output in June which will be confirmed and published alongside the

GDP data on Thursday. Three of the four analysts polled expect services output

to have expanded 0.3% m/m in June, in line with the thinking of the ONS.

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

                         Jun       Jun

                          UK        UK

                    Index of  Index of

                    Services  Services

                       % M/M     % Q/Q

Date Out              24-Aug    24-Aug

Median                   0.3       0.5

Forecast High            0.3       0.5

Forecast Low             0.2       0.5

Standard Deviation       0.0       0.0

Count                      5         4

Prior                    0.2       0.4

Capital Economics        0.3       0.5

HSBC                     0.3       0.5

JP Morgan                0.3       N/A

Lloyds TSB               0.2       0.5

Oxford Economics         0.3       0.5

     Household consumption, the primary driver pf GDP growth and largely

responsible for the slowdown in the first half of the year. Spending grew by

only 0.3% q/q in Q1, the weakest outturn since the final quarter of 2014. It

could rebound in Q2 on account of healthier retail sales activity (sales volumes

grew 1.5% in Q2 having contracted 1.4% in Q1).

     In addition, observers will look to see how business investment and net

trade evolved between April and June. In Q1, investment was up 0.6% q/q after

declining 0.9% q/q in 2016 Q4. Net trade, however, deteriorated over the first

three months of the year and subsequently subtracted 1.4pp from growth.

     The Bank of England has previously said they were watching to see if these

two components would pick up the slack from softer household spending, as real

earnings continue to contract, and prevent growth from slowing further.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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