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25 Jul 2014
UK GDP expected to come in at 0.6% in Q2 – TD Securities
FXStreet (Łódź) - Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities, suggests that due to softer industrial production and construction activity data for Q2, UK GDP could come in at only +0.6% today.
Key quotes
“Consensus is looking for 0.8% Q/Q GDP growth in Q2, the same pace as in Q1, but we see downside risks and look for a 0.6% reading.”
“After softer industrial production and construction activity for Q2, we’ll need to see that much more of a contribution from the services sector in order to maintain the same growth rate as we saw through the prior few quarters.”
“And while the retailing side did even better in Q2 than it did in Q1, the rest of the services side may struggle a little more, especially on real estate/finance given the recent declines in mortgage approvals and housing transactions.”
“So even if the overall services sector maintains the 0.9% growth rate from Q1, that still leaves total GDP short of consensus expectations.”
Key quotes
“Consensus is looking for 0.8% Q/Q GDP growth in Q2, the same pace as in Q1, but we see downside risks and look for a 0.6% reading.”
“After softer industrial production and construction activity for Q2, we’ll need to see that much more of a contribution from the services sector in order to maintain the same growth rate as we saw through the prior few quarters.”
“And while the retailing side did even better in Q2 than it did in Q1, the rest of the services side may struggle a little more, especially on real estate/finance given the recent declines in mortgage approvals and housing transactions.”
“So even if the overall services sector maintains the 0.9% growth rate from Q1, that still leaves total GDP short of consensus expectations.”