Glimmers of Hope for UK GDP

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Glimmers of Hope for UK GDP

Glimmers of Hope for UK GDP



UK GDP figures were revised upwards yesterday, rising by a whopping 0.1% to -0.4%, so the double dip recession isn't quite as bad as previously thought.

UK GDP figures were revised upwards yesterday, rising by a whopping 0.1% to -0.4%, so the double dip recession isn't quite as bad as previously thought.

This is certainly nothing to get excited about, but given that the first reading came in at -0.7% only a few weeks ago, we really aren't getting much in the way of consistency.

The extra bank holiday for the Queen's Jubilee was certainly one contributing factor to the loss of output. However, whilst many expect GDP figures to show growth in Q3, the fact that one extra day off can keep us in a technical recession shows just how fragile the UK economy is.

Whilst there are glimmers of hope for UK GDP going forward, the truth is that we are not much better off than the most worrisome economic circumstances in the Eurozone.

The situation there is impacting the UK significantly, as the current account figures revealed yesterday, with exports of goods and services slumping to record lows.

The bottom line is that an unhappy Europe leads to an unhappy UK, and if the situation there deteriorates then we can expect it to have a very negative effect on us.

At least the Jubilee seems to have made consumers a little more optimistic; this morning's data shows that consumer confidence has risen to its highest level for 15 months.

Rather like the GDP numbers, this is nothing to get particularly excited about. Nevertheless, a move in the GfK index from -29 to -28 is at least a start, especially when you consider just how appalling the wonderful British summer was this year.

The mild improvements in the UK's prospects are being overshadowed by what's happening on the continent, and they haven't really been reflected in equity markets which continue to stick within their narrow ranges.

At the very least we did see a rally for US stocks yesterday, despite the ongoing street protests in Spain.

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By Simon Denham, 28 September 2012


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