| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.4% | 0.0% | |
| 3-Months over 3-Months | 0.7% | 0.9% | 0.7% | 0.8% |
Highlights
The economy was surprisingly robust in May. A 0.4 percent monthly rise in GDP was double the market consensus and matched its best performance since June last year. The advance boosted 3-monthly growth from 0.8 percent to a very respectable 0.9 percent while the annual rate doubled to 1.4 percent, equalling its highest print since October 2022.
The headline monthly gain was broad-based, reflecting a 0.3 percent increase in services output together with a 0.2 percent rise in industrial production (manufacturing 0.4 percent) and a 1.9 percent jump in construction. Services have now expanded for five consecutive months with the May increase attributable to advances in eight of the 14 subsectors, notably accommodation and food (2.4 percent) and arts, recreation and entertainment (1.2 percent).
The May report leaves total output well set for a good second quarter. As the data currently stand, average GDP in April/May stands 0.6 percent above its first quarter mean and, ignoring revisions, June would need at least a 1.8 percent monthly slump to prevent positive second quarter growth. Today's update will help to ease pressure on the BoE MPC to ease in August and, with the UK RPI now at 6 and the RPI-P at 11, leaves overall economic activity running just a little ahead of market forecasts.
The headline monthly gain was broad-based, reflecting a 0.3 percent increase in services output together with a 0.2 percent rise in industrial production (manufacturing 0.4 percent) and a 1.9 percent jump in construction. Services have now expanded for five consecutive months with the May increase attributable to advances in eight of the 14 subsectors, notably accommodation and food (2.4 percent) and arts, recreation and entertainment (1.2 percent).
The May report leaves total output well set for a good second quarter. As the data currently stand, average GDP in April/May stands 0.6 percent above its first quarter mean and, ignoring revisions, June would need at least a 1.8 percent monthly slump to prevent positive second quarter growth. Today's update will help to ease pressure on the BoE MPC to ease in August and, with the UK RPI now at 6 and the RPI-P at 11, leaves overall economic activity running just a little ahead of market forecasts.
Market Consensus Before Announcement
May GDP is expected rise 0.2 percent versus April when it stagnated on the back of weak industrial production.
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.
