Q4 2017 UK GDP 1st revision report 22 February 2018

  • Prior 0.5%
  • 1.4% vs 1.5% exp y/y. Prior 1.5%
  • Business investment 0.0% vs 0.5% exp q/q. Prior 0.5%
  • 2.1% vs 2.4% exp y/y. Prior 1.7%
  • Exports -0.2% vs 0.5% exp q/q. Prior 0.8%
  • Imports 1.5% vs 1.0% exp q/q. Prior 0.9%
  • Consumption 0.3% vs 0.4% exp q/q. Prior 0.5%. Revised to 0.4%
  • Gov spending 0.6% vs 0.3% exp q/q. Prior -0.2%
  • Gross fixed cap formation 1.1% vs 0.5% exp q/q. Prior 0.3%
  • Dec 2017 index of services 0.0% vs 0.0% exp m/m. Prior 0.4%
  • 0.5% vs 0.5% exp 3m/3m. Prior 0.4%

Notes

  • Services output rose 0.6% Q4 17
  • Growth in household consumption/business investment slowed in Q4 17
  • Downward revisions to mining, energy generation and services led lower print
  • Production/ services output grew in Q4 17, construction fell for third quarter
  • GDP for 2017 revised lower to 1.7% from 1.8%; slowest rate since 3M – Dec 2012

On the face of it a bad report but not without some plus points. Business investment disappoints q/q but still rose y/y. Spending wasn’t as good as expected but government spending and investment helped prop things up.

We can get tied up in the details but the real question to look at the growth numbers and ask is whether these are the sorts of numbers that a central bank should want to hike into? From where i’m sitting, the answer is “No”.

Ryan Littlestone
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