UK: collapse less apocalyptic than feared
- UK GDP’s collapse in Mar-20 did not match the almost apocalyptic depths that the Consensus feared. Its 5.8% m-o-m decline is dire, but close to my forecast, and precisely so on the 2% q-o-q headline. That has been a moving target, though.- A methodological change announced by the ONS last week knocked over 1pp from the headline monthly rate and my forecast. Breaking the usual link between inputs and non-market outputs may create alignment issues that reduces the upside bias.
- As lockdown during March means month-end was worse than the reported average, changes should roughly double in April. However, Easter holidays will prevent the education hit from being fully felt until May, offsetting partial recovery elsewhere.
- I broadly maintain my 2Q20 GDP growth forecast of -10% q-o-q. Supported by the new data, I still see the BoE, OBR, and Consensus as too gloomy on the near-term. I remain more pessimistic about the damage to the subsequent recovery, though.
Heteronomics provides UK-centric macro research. A hallmark attention to detail delivers a depth of analysis beyond what the sell side now delivers. Clients can also experience events that privately provide insights on these topics. Have a bespoke request for research or an event? Let us know. Clients can expect assistance with their own requirements to the extent it doesn't impinge upon other clients. Think of it as retaining an expert economist, without the large overhead.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.