UK GDP: An expected bounce; Still weak
Commenting on this morning’s UK GDP data Melanie Baker, senior economist at Royal London Asset Management, said:
"The bounce in October GDP may have been a touch stronger than consensus expected after the extra bank holiday hit output in September, but taking September and October together paints a downbeat picture of UK economic growth going in to Q4. The level of GDP is barely above where it was pre-pandemic, part of the bounce in services output was down to vaccination and test and trace activity and more than half the manufacturing subsectors saw declines in output.
"The UK could escape a technical recession (for now) if November and December output was flat, but falling output would be more consistent with the picture being painted by business surveys.
"With inflation as strong as it is, and despite the downbeat picture for economic activity, another Bank of England rate hike is very likely on Thursday."
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About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £150 billion of assets as at 30 June 2022. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
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Issued August 2022 by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.
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