Q2 2015 UK GDP final data report 30 September 2015

  • Prelim 0.7%
  • 1st revision 0.7%
  • Q1 0.4%
  • 2.4% vs 2.6% exp y/y. Prior 2.6%
  • Business investment 1.0% vs 2.9% prior q/q
  • 3.1% vs 5.0% prior y/y
  • Jul Index of services 0.2% vs 0.2% exp m/m. Prior 0.5%. revised to 0.6%
  • 0.8% v s0.8% exp 3m/3m. Prior 0.7%. Revised to 0.6%
  • Q2 Current account -16.767bn vs -22.250bn exp. Prior -26.548bn. Revised to -24.009bn
  • Q2 Services 0.6% vs 0.7% prior
  • Q2 Industrial production 0.7% highest since Q4 2010
  • Q2 Construction 1.4% vs 0.2% prior

Lots to look through. On the face of it a disappointing y/y drop despite q/q holding steady

Better news on the household front with disposable incomes 2.0% vs 0.3% in Q1. It's running at 3.7% y/y and the highest since Q1 2010. The savings ratio jumped to 4.7% from 4.0% in Q1, highest since Q4 2014

For the revisions;

  • 2014 GDP revised to 2.9% from 3.0%
  • 2013 GDP revised to 2.2% from 1.7%
  • 2012 GDP revised to 1.0% vs 0.7%
  • UK economy 5.9% above pre-crisis high vs 5.2% prior
  • Q1 2015 unrevised (0.4%%)
  • ONS says drop in business investment due to changed estimates of R&D, SME investment and software

The better current account balance is a major plus and with the business investment drop being put down to new calculations that might be behind the recovery in the pound as it pushes to 1.5180

UYK Q2 GDP y/y