| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.1% | 0.0% | 0.0% |
| 3-Months over 3-Months | 0.6% | 0.5% | 0.6% |
Highlights
The economy stuttered again at the start of the current quarter. July GDP only flatlined at June's level when it also failed to register any growth. This was a tick short of the market consensus and trimmed the 3-monthly change from 0.6 percent to 0.5 percent. However, annual growth still accelerated from 0.7 percent to 1.2 percent, its strongest reading since June last year.
Services output expanded just 0.1 percent on the month, reversing the previous period's decline, while a 0.8 percent drop in industrial production similarly fully unwound its June advance. Within the latter, manufacturing was down fully 1.0 percent. Elsewhere, construction decreased 0.4 percent following a 0.5 percent advance last time.
The July data are softer than expected and suggest that the economy has lost some momentum in recent months. Indeed, GDP has only expanded once since April. As such, today's report may be seen as boosting the chances of the BoE MPC lowering Bank Rate again next week. Some members will almost certainly want another 25 basis point cut but, at least until next week's August CPI update, the outcome of the vote remains far from clear. Today's releases put the UK RPI at minus 9 and the RPI-P at minus 15 meaning that in general, economic activity is falling slightly short of market forecasts.
Services output expanded just 0.1 percent on the month, reversing the previous period's decline, while a 0.8 percent drop in industrial production similarly fully unwound its June advance. Within the latter, manufacturing was down fully 1.0 percent. Elsewhere, construction decreased 0.4 percent following a 0.5 percent advance last time.
The July data are softer than expected and suggest that the economy has lost some momentum in recent months. Indeed, GDP has only expanded once since April. As such, today's report may be seen as boosting the chances of the BoE MPC lowering Bank Rate again next week. Some members will almost certainly want another 25 basis point cut but, at least until next week's August CPI update, the outcome of the vote remains far from clear. Today's releases put the UK RPI at minus 9 and the RPI-P at minus 15 meaning that in general, economic activity is falling slightly short of market forecasts.
Market Consensus Before Announcement
GDP in the month of July is expected to rise 0.1 percent versus no change in June which was a tick short of expectations.
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.
