UK Q1 growth soft but probably underestimated again
Simon Ward
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GDP is provisionally estimated to have risen by only 0.2% in the first quarter but this is likely to be revised up, as were the prior three quarters – fourth-quarter growth was raised from an original 0.1% to 0.4%.
The current estimate is overly reliant on data for January and February, when the economy was hit by bad weather. National Statistics has assumed that GDP rose by 0.3% between February and March – see chart – but this may underestimate the catch-up effect. An upward revision is also suggested by labour market data and business surveys, showing a further rise in capacity utilisation last quarter.
GDP is currently estimated to have been 0.3% lower than in the first quarter of 2009 but this decline is explained by lower North Sea production – gross value added excluding oil and gas extraction was up by 0.1%, the first annual gain since the third quarter of 2008.
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