It’s UK GDP Day
Gross Domestic Product isn’t a perfect measure. And that’s no wonder — how can a single number sum up everything, good and bad, that happens in an economy?
GDP can’t distinguish between activity that’s actively harmful, and that which makes our lives better. It struggles to cope with the internet, isn’t great at measuring improvements in services, and can’t cope with unpaid work at all.
But despite these flaws, GDP is the ‘go-to’ measure for policymakers who want to know how their economy is faring. And today, Britain’s economy is in the spotlight.
GDP figures for the fourth quarter of 2018, due at 9.30am, are expected to show a sharp slowdown. Economists predict that the economy only grew by around 0.3% in October-December, just half as fast as the 0.6% recorded during the heatwave of July-September.
Philip Shaw, chief economist at Investec, predicts that the economy may not have grown in December at all.
“Putting the pieces together, we are forecasting GDP to have remained unchanged in December, although it is possible that we see a very small gain,” he said. “This results in a 0.3% rise [for the fourth quarter].
“We will look closely at business investment – the area which we consider to be the most affected by Brexit worries – and specifically to see if it recorded its fourth consecutive quarterly decline in the fourth quarter.”
Here’s Angela Monaghan’s preview:
Such muted growth would reinforce concerns that the UK, and the wider global economy, is weakening. Brexit, the US-China trade wars, and political tensions in the eurozone will all be blamed.
Today’s report will show how manufacturing, services and construction all fared in the last quarter. The Office for National Statistics will also report new trade figures, giving a decent picture of the health of the economy as we prepare for Brexit.
- 9.30am GMT: UK GDP report for Q4 2018 released
- 9.30am GMT: UK trade balance for December