{"id":3136,"date":"2010-12-22T10:57:42","date_gmt":"2010-12-22T10:57:42","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3136"},"modified":"2025-03-27T15:49:10","modified_gmt":"2025-03-27T15:49:10","slug":"uk-gdp-revision-confirms-strong-investment-pick-up","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3136","title":{"rendered":"UK GDP revision confirms strong investment pick-up"},"content":{"rendered":"<p>Revised GDP figures continue to portray a solid economic recovery, with nominal demand growing above a rate likely to be compatible with the inflation target over the medium term.<\/p>\n<ul>\n<li>\n<p>GDP grew by 2.7% in the year to the third quarter, revised down from 2.8%. Assuming, conservatively, a quarterly gain of 0.5% in the current quarter, full-year growth will be 1.7% versus a consensus forecast of 1.3% in December 2009.<\/p>\n<\/li>\n<li>\n<p>The official GDP series relies on output data; an expenditure-based estimate rose by 2.9% in the year to the third quarter (i.e. adding back the &#8220;statistical discrepancy&#8221;).<\/p>\n<\/li>\n<li>\n<p>Encouragingly, annual growth in business investment was revised up substantially, from 4.6% to 8.9%, showing that spending is responding as expected to an earlier strong improvement in corporate liquidity &ndash; see first chart. Also, the household saving ratio rebounded from 3.5% to 5.0% in the third quarter, implying that consumers have more in reserve as high inflation and tax hikes constrain real income expansion. Stockbuilding, meanwhile, was modest last quarter, at 0.1% of GDP.<\/p>\n<\/li>\n<li>\n<p>Discouragingly, the previously-reported improvement in net exports in the third quarter has been revised away, dashing the MPC&#8217;s hopes that &#8220;the necessary rebalancing towards net trade might have begun&#8221; (according to the December minutes).<\/p>\n<\/li>\n<li>\n<p>The annual increase in the GDP deflator at market prices was revised down from 3.0% to 2.4%, accounting for the bulk of a reduction in nominal GDP expansion from 5.9% to 5.1%. The latter figure, however, was depressed by a large rise in the trade deficit between the third quarters of 2009 and 2010, partly reflecting surging import costs. A more appropriate focus for the MPC is nominal domestic demand, which rose by an annual 6.8% (revised from 7.1%) &ndash; the fastest since 1999.<\/p>\n<\/li>\n<li>\n<p>Relative to the pre-recession peak, GDP is slightly ahead of the level at the corresponding stage of the early 1980s recovery, which followed a recession of comparable scale (slightly deeper if measured by GDP excluding North Sea oil and gas production) &ndash; second chart.<\/p>\n<\/li>\n<\/ul>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/chart1_22-12-2010.gif?__SQUARESPACE_CACHEVERSION=1293016243316\" alt=\"\" \/><\/span><\/span><\/p>\n<p>&nbsp;<br \/><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" style=\"width: 680px;\" src=\"\/storage\/chart2_22-12-2010.gif?__SQUARESPACE_CACHEVERSION=1293016286615\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Revised GDP figures continue to portray a solid economic recovery, with nominal demand growing above a rate likely to be compatible with the inflation target over the medium term. GDP grew by 2.7% in the year to the third quarter, revised down from 2.8%. Assuming, conservatively, a quarterly gain of 0.5% in the current quarter, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3136","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3136"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3136\/revisions"}],"predecessor-version":[{"id":5445,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3136\/revisions\/5445"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}