Revisions from the ONS mean that quarterly GDP growth in Q3 is now estimated to have been 0.6% – the same as in Q2. What’s more, business surveys suggest that this pace was maintained in Q4. Admittedly, the surveys also brought more evidence of inflationary pressures building throughout the supply chain which will squeeze real incomes. But forward-looking indicators suggest that this won’t have too large of an impact on activity. Indeed, the new orders balance of the Markit/CIPS all-sector PMI reached its highest level since April 2011 in December. What’s more, survey measures of employment and investment intentions have picked up in recent months. And housing market new buyer enquiries have recovered significantly. Accordingly, we have revised up our GDP growth forecast for 2017 from 1.5% to 1.8%, which would be down only slightly from the 2.0% we expect for 2016 as a whole.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services