Saturday, October 27, 2012

27/10/2012: UK Q3 2012 'Growthology'


So UK is out of the second-dip recession? But, seemingly not out of the Great Recession:


via Citi Research.

At this speed of a 'recovery' UK folks can look forward to a down-cycle peak-to-peak of 5.5 years this time around, as compared to 4 years in the 1930s, 3 1/4 years in the 1970s and 1980s and 2 3/4 years in 1990s.

Never mind... it was so all curable by the Olympics & the Jubilee... Or as Citi put it:
"The rebound from the Jubilee in Q2 probably added about 0.5% to Q3 growth, while the direct effects of Olympic ticket sales added roughly 0.2%, and the ONS notes that there may have been wider positive effects from the Olympics on service sector growth (and this is the sector which was much stronger than we expected). So underlying growth in Q3 may have been 0.2-0.3% QoQ. In our view, the underlying path of the economy has been fairly flat throughout the last four quarters, with erratic swings in individual quarters: GDP fell in Q1 and Q2, reflecting weakness in construction in both quarters plus the adverse effects on activity of the Queen’s Jubilee, and the Olympics plus rebound from the Jubilee played a major role in the positive Q3 figure. The more that Q3  benefited from temporary Olympics-related positives, the more likely that Q4 GDP growth will disappoint as that boost fades."
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