GDP is provisionally estimated to have fallen by 0.5% in the fourth quarter, against market expectations of a 0.5% rise. The estimate is unusually uncertain because of December's bad weather disruption and a change in Office for National Statistics (ONS) procedures to try to include the impact – the preliminary number normally incorporates limited information for the final month of the quarter. The ONS thinks that GDP would have been "flattish" without the bad weather.

The ONS assessment is probably too downbeat. As explained below, it may have overestimated the weather hit to December GDP while data for October / November suggest that the economy would have expanded by about 0.25% in the absence of the disruption. The bulk of the output loss, moreover, is temporary and will be recouped in early 2011, boosting first-quarter GDP.

Official GDP figures are quarterly but a monthly estimate can be constructed from data on industrial, construction and services output (the November services number was also released this morning) – see first chart. This reveals that the average level of GDP in October and November was 0.1% higher than in the third quarter. In the absence of the bad weather, GDP would probably have risen in December – the PMI manufacturing new orders and services new business indices rose to four- and five-month highs respectively in November. So GDP was on track for a quarterly gain of about 0.25%.

To generate its estimate of a 0.5% quarterly fall, the ONS has incorporated a 1.8% decline in December. There are two reasons for thinking that this may be too large. First, it exceeds the declines in January and April 2010, of 1.7% and 1.4%, associated with bad weather and air transport disruption due to volcanic ash respectively. Secondly, the December estimate probably relied on information for the early and middle parts of the month when disruption was most severe.

The January 2010 weather-related fall was followed by a strong rebound that pushed GDP temporarily well above the underlying trend – first chart. The bulk of the lost output, therefore, was recouped by March, implying little effect on first-quarter GDP. The current distortion to the quarterly GDP profile is much larger because the hit and recovery occur in different quarters. If monthly GDP changes over January-March 2011 were to mirror those in the three months following the January 2010 slump – a reasonable scenario – GDP would increase by 1.2% in the first quarter.

The second chart updates a comparison of the 2008-09 recession and recovery with prior cycles. The current upswing continues to resemble that of the early 1980s, with last quarter's GDP fall reversing a slight overshoot of the earlier path in the third quarter. A strong first-quarter rebound would maintain the similarity.

Today's number is manna from heaven for stale economic bears and MPC members seeking new excuses for interest-rate inaction – "one-off" distortions, it appears, only ever work in the doves' favour. The underlying reality is that the economic recovery is probably proceeding at a moderate pace, with a slowdown from above-trend growth in mid 2010 consistent with recent monetary trends.