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26 Feb 2015
UK Q4 14 GDP unchanged at 0.5%, casts doubt on 2015 growth forecasts – RBS
FXStreet (Barcelona) - According to Ross Walker, Senior UK Economist at RBS, UK Q4 2015 GDP came in as expected at 0.5% qoq, but casts doubt on the optimistic forecasts for 2015 growth.
Key Quotes
“UK Q4 2014 GDP growth was unrevised at 0.5% q/q, 2.7% y/y, as expected (consensus & RBS: 0.5%, 2.7%, City forecast ranges: 0.5%-0.6% q/q, 2.7%-2.8% y/y). This is a respectable outturn but hardly a spectacular pace of growth – and, in our view, casting doubt on the more optimistic forecasts for near-3% expansion in 2015 (MPC: 2.9%, consensus: 2.7%, RBS: 2.3%).”
“For 2014 as a whole, the UK economy grew by 2.6%, up from 1.7% in 2013.”
“Growth in 2014 was ‘investment-led’ (6.8%), with consumer spending growing by a near-trend 2.1%.”
“The recovery in 2014 as a whole was domestic in nature, with trade subtracting 0.3pp from calendar-year GDP.”
“In our view, the macroeconomic terrain looks more forbidding in 2015, with a resumption of fiscal tightening likely to weigh on government consumption (we are highly unlikely to see a repeat of 2014’s 1.5% growth) and tepid global demand likely to result in a broadly flat contribution from net trade. We continue to lean against the overly sanguine consensus.”
Key Quotes
“UK Q4 2014 GDP growth was unrevised at 0.5% q/q, 2.7% y/y, as expected (consensus & RBS: 0.5%, 2.7%, City forecast ranges: 0.5%-0.6% q/q, 2.7%-2.8% y/y). This is a respectable outturn but hardly a spectacular pace of growth – and, in our view, casting doubt on the more optimistic forecasts for near-3% expansion in 2015 (MPC: 2.9%, consensus: 2.7%, RBS: 2.3%).”
“For 2014 as a whole, the UK economy grew by 2.6%, up from 1.7% in 2013.”
“Growth in 2014 was ‘investment-led’ (6.8%), with consumer spending growing by a near-trend 2.1%.”
“The recovery in 2014 as a whole was domestic in nature, with trade subtracting 0.3pp from calendar-year GDP.”
“In our view, the macroeconomic terrain looks more forbidding in 2015, with a resumption of fiscal tightening likely to weigh on government consumption (we are highly unlikely to see a repeat of 2014’s 1.5% growth) and tepid global demand likely to result in a broadly flat contribution from net trade. We continue to lean against the overly sanguine consensus.”