Friday, December 21, 2012
GDP - the picture evolves
Posted by David Smith at 05:30 PM
Category: Thoughts and responses

The second revision of the third quarter GDP figures showed a downward revision from 1% to 0.9% but upward revisions to earlier data. So growth is now flat on a year ago, compared with a drop of 0.1% in the earlier data. Two of the "double-dip" quarters, Q4 2011 and Q1 2012 have been revised higher though still show small negatives.

The detail in the numbers is quite interesting. They point to a household sector which, while still constrained by the high-inflation squeeze on earnings, has adjusted significantly. The saving ratio has risen from 7.4% to 7.7% and real household disposable income, after an odd looking 2.3% jump in the second quarter, rose by 0.4% in the third. There is much more here.

Also today, the current account deficit narrowed to 12.8 billion in the third quarter from a downward-revised 17.4 billion in the second. It remains on course for a 2012 deficit of more than 50 billion, however. Details here.

Finally, the public finances were a touch disappointing, with public sector net borrowing of 17.4 billion in November and underlying borrowing running about 10% above 2011-12 levels. This is the Office for Budget Responsibility's take on the figures. It points out that two one-off factors, the 4G spectrum sale and the transfer of 11.5 billion of gilt coupons from the Bank of England to the Treasury will benefit the figures. But it is also relying on stronger VAT and self-assessment receipts.