| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.2% | 0.2% | -0.1% |
| 3-Months over 3-Months | -0.1% | -0.1% | -0.3% |
Highlights
The economy performed as expected in January. A 0.2 percent monthly rise in real GDP was in line with the market consensus and more than reversed an unrevised 0.1 percent dip at the end of 2023. The increase put the 3-monthly change at minus 0.1 percent, up from minus 0.3 percent, but annual growth at minus 0.3 percent, down from 0.0 percent.
The monthly headline advance was largely attributable to services where output expanded 0.2 percent after a 0.1 percent fall in December. Within this, wholesale and retail (1.9 percent) had a particularly good period as did administrative and support services (0.6 percent) and education (0.7 percent). By contrast, industrial production fell 0.2 percent despite a flat month for manufacturing output but construction advanced fully 1.1 percent, its strongest rise since last June.
Total output now stands at its highest mark since last September and 0.2 percent above its average level last quarter. With business surveys modestly optimistic about February, the economy would seem to be on course to move out of recession by March. Growth is not strong but the apparent pick up in momentum should leave the BoE MPC all the more cautious about cutting Bank Rate. That said, today's updates trim the UK RPI to minus 13 and the RPI-P to minus 10, both measures showing overall economic activity falling a little short of forecasts.
The monthly headline advance was largely attributable to services where output expanded 0.2 percent after a 0.1 percent fall in December. Within this, wholesale and retail (1.9 percent) had a particularly good period as did administrative and support services (0.6 percent) and education (0.7 percent). By contrast, industrial production fell 0.2 percent despite a flat month for manufacturing output but construction advanced fully 1.1 percent, its strongest rise since last June.
Total output now stands at its highest mark since last September and 0.2 percent above its average level last quarter. With business surveys modestly optimistic about February, the economy would seem to be on course to move out of recession by March. Growth is not strong but the apparent pick up in momentum should leave the BoE MPC all the more cautious about cutting Bank Rate. That said, today's updates trim the UK RPI to minus 13 and the RPI-P to minus 10, both measures showing overall economic activity falling a little short of forecasts.
Market Consensus Before Announcement
GDP in the month of January is expected to rise 0.2 percent versus 0.1 percent contraction in December.
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.
