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7 Jan 2015
UK showing signs of a slowdown? – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, maintains a positive outlook on UK GDP, expecting the 4Q14 GDP to match 3Q14 supported by strengthening consumer spending.
Key Quotes
“The purchasing managers’ indices were disappointing, but consumer spending looks set to fill the gap.”
“Yesterday’s service sector purchasing managers’ index replicated the disappointing performance of both the manufacturing and construction surveys. The headline index dropped to 55.8 in December from 58.6, which was below the 58.5 consensus prediction.”
“When combined with the manufacturing and construction surveys, the composite index has fallen to 55.2 from 57.6, which was lower than the 57.4 figure anticipated by markets. This is the weakest outcome since May 2013 with the survey compiler suggesting that this is consistent with 4Q GDP growth slowing to +0.5% QoQ from +0.7% QoQ in 3Q14.”
“We are more optimistic than that though given the apparent strength of consumer spending in 4Q14 and wouldn’t be surprised to see GDP come in at a similar rate to the 3Q14 figure – note the strong retail sales numbers and the encouraging newsflow regarding December.”
Key Quotes
“The purchasing managers’ indices were disappointing, but consumer spending looks set to fill the gap.”
“Yesterday’s service sector purchasing managers’ index replicated the disappointing performance of both the manufacturing and construction surveys. The headline index dropped to 55.8 in December from 58.6, which was below the 58.5 consensus prediction.”
“When combined with the manufacturing and construction surveys, the composite index has fallen to 55.2 from 57.6, which was lower than the 57.4 figure anticipated by markets. This is the weakest outcome since May 2013 with the survey compiler suggesting that this is consistent with 4Q GDP growth slowing to +0.5% QoQ from +0.7% QoQ in 3Q14.”
“We are more optimistic than that though given the apparent strength of consumer spending in 4Q14 and wouldn’t be surprised to see GDP come in at a similar rate to the 3Q14 figure – note the strong retail sales numbers and the encouraging newsflow regarding December.”