| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.4% | 0.1% | 0.2% |
| 3-Months over 3-Months | 0.4% | 0.6% | 0.2% |
Highlights
The economy ended the first quarter on a surprisingly bright note. A 0.4 percent monthly rise in real GDP was double the market consensus and following an upwardly revised 0.2 percent advance in February, made for quarterly growth of fully 0.6 percent. March's gain was the best performance since last June and means that the 2023 recession was both shallow and short-lived. Annual growth was 0.7 percent, up from 0.0 percent and a 6-month high.
Monthly growth was led by services which posted a 0.5 percent rate, up from 0.3 percent in February. Goods production rose a more modest 0.2 percent within which manufacturing output increased 0.3 percent. However, construction extended its downswing with a 0.4 percent decline, its fifth fall in the last six months.
Total output now stands at a new all-time high and the March gain will probably be seen by most BoE MPC members as providing further justification for yesterday's decision to leave Bank Rate on hold. To be sure, the buoyancy of services activity will not be wasted on the hawks. Today's updates raise the UK RPI to a solid 41 and the RPI-P to an even higher 52. Economic activity is clearly now exceeding expectations by some margin and, despite some recent dovish comments, should ensure that the BoE will remain wary about cutting interest rates too soon.
Monthly growth was led by services which posted a 0.5 percent rate, up from 0.3 percent in February. Goods production rose a more modest 0.2 percent within which manufacturing output increased 0.3 percent. However, construction extended its downswing with a 0.4 percent decline, its fifth fall in the last six months.
Total output now stands at a new all-time high and the March gain will probably be seen by most BoE MPC members as providing further justification for yesterday's decision to leave Bank Rate on hold. To be sure, the buoyancy of services activity will not be wasted on the hawks. Today's updates raise the UK RPI to a solid 41 and the RPI-P to an even higher 52. Economic activity is clearly now exceeding expectations by some margin and, despite some recent dovish comments, should ensure that the BoE will remain wary about cutting interest rates too soon.
Market Consensus Before Announcement
GDP in the month of March is expected to rise 0.2 percent. Without any revisions, March would need to contract 1.1 percent to prevent positive first-quarter growth.
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.
