UK services turnover booming
Simon Ward
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Services turnover figures for July and August suggest that GDP rose by about 1% in the third quarter – a preliminary official estimate will be released on 25 October.
Annual growth in turnover value was 11.0% in July / August combined, up from 10.0% in the second quarter. This suggests that the quarterly increase in services output volume last quarter at least matched that a year earlier, in the third quarter of 2012. The latter rise was 1.0%, partly reflecting the Olympics boost.
A 1.0% rise in services output would contribute 0.8 percentage points (pp) to quarterly GDP growth. Output data for industry and construction for July / August are consistent with the two sectors adding about 0.2 pp, for a GDP gain of 1.0%.
Such growth would be above the consensus estimate of 0.8% but would be consistent with the strength of recent business surveys and labour market data. It is, of course, possible that the Office for National Statistics will issue a lower preliminary number that is subsequently revised up.
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