| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.1% | 0.3% | -0.3% | |
| 3-Months over 3-Months | -0.1% | -0.2% | 0.0% | -0.2% |
Highlights
The economy was a good deal stronger than expected in November. A 0.3 percent monthly increase in GDP was 0.2 percentage points steeper than the market consensus and fully reversed the surprisingly sharp 0.3 percent contraction at the start of the quarter. This was the best performance since last June. Annual growth climbed from minus 0.1 percent to 0.2 percent but earlier downward revisions meant that the 3-monthly change was only flat at minus 0.2 percent.
November's rebound was driven by services where output was up 0.4 percent versus October. Within this there were solid gains in information and communication (1.5 percent), arts entertainment and recreation (1.4 percent) and other services (1.6 percent). Goods production also increased 0.3 percent with manufacturing a tick firmer at 0.4 percent. By contrast, construction fell 0.2 percent, its fourth decline in the last five months.
Today's update reduces the chances of recession at year-end although it remains a possibility. Without any revisions, GDP will need to expand only 0.1 percent on the month in December to rule out a second successive quarterly contraction. The economy looks to be flatlining. That said, today's updates put the UK RPI at 21 and the RPI-P at 16. Both readings show a moderate degree of overall economic outperformance making no change in Bank Rate at the BoE's MPC meeting next month all the more likely.
November's rebound was driven by services where output was up 0.4 percent versus October. Within this there were solid gains in information and communication (1.5 percent), arts entertainment and recreation (1.4 percent) and other services (1.6 percent). Goods production also increased 0.3 percent with manufacturing a tick firmer at 0.4 percent. By contrast, construction fell 0.2 percent, its fourth decline in the last five months.
Today's update reduces the chances of recession at year-end although it remains a possibility. Without any revisions, GDP will need to expand only 0.1 percent on the month in December to rule out a second successive quarterly contraction. The economy looks to be flatlining. That said, today's updates put the UK RPI at 21 and the RPI-P at 16. Both readings show a moderate degree of overall economic outperformance making no change in Bank Rate at the BoE's MPC meeting next month all the more likely.
Market Consensus Before Announcement
GDP in the month of November is expected to rise 0.1 percent versus steeper-than-expected contraction of 0.3 percent in October.
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.
