| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | -0.1% | -0.3% | 0.2% |
| 3-Months over 3-Months | 0.0% | 0.0% |
Highlights
The economy was a good deal weaker than expected at the start of the quarter. A 0.3 percent monthly fall in GDP was 0.2 percentage points steeper than the market consensus and the worst performance since July's 0.6 percent slump. The contraction left the 3-monthly change flat at 0.0 percent but slashed annual growth from 1.3 percent to just 0.3 percent, a 5-month trough.
October's setback reflected a 0.2 percent fall in services and a 0.8 percent slide in goods production. Within the former, notably sharp declines were seen in information and communication (1.7 percent), professional, scientific and technical activities (0.7 percent) and other services (1.2 percent). Construction was also down 0.5 percent to ensure a broad-based contraction in total output.
October's sizeable fall leaves GDP 0.1 percent below its average level in the third quarter when the economy provisionally stagnated. Accordingly, while recession may still be avoided this year, it is likely to be very close and, on current trends, might well arrive by early 2024. Today's surprisingly weak updates reduce the UK RPI to minus 25 and the RPI-P to minus 33. Both readings show economic activity falling quite well short of market expectations and so bolster the likelihood of no change in Bank Rate tomorrow.
October's setback reflected a 0.2 percent fall in services and a 0.8 percent slide in goods production. Within the former, notably sharp declines were seen in information and communication (1.7 percent), professional, scientific and technical activities (0.7 percent) and other services (1.2 percent). Construction was also down 0.5 percent to ensure a broad-based contraction in total output.
October's sizeable fall leaves GDP 0.1 percent below its average level in the third quarter when the economy provisionally stagnated. Accordingly, while recession may still be avoided this year, it is likely to be very close and, on current trends, might well arrive by early 2024. Today's surprisingly weak updates reduce the UK RPI to minus 25 and the RPI-P to minus 33. Both readings show economic activity falling quite well short of market expectations and so bolster the likelihood of no change in Bank Rate tomorrow.
Market Consensus Before Announcement
GDP in the month of October is expected to fall 0.1 percent versus 0.2 percent expansion in September.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The monthly report is based on output data only as the income and expenditure series are not available.
Description
GDP covers all aspects of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market investors like to see healthy economic growth because robust business activity translates to higher corporate profits. GDP contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. However, the monthly report is quite limited and only provides data on the main output sectors. More detailed information is available in the quarterly reports.
