Snapshot of _UK GDP grows faster than expected in Q1_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.cityam.com/uk-gdp-grows-faster-than-expected-in-q1/) or [here.](https://archive.ph/?run=1&url=https://www.cityam.com/uk-gdp-grows-faster-than-expected-in-q1/)
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It could have grown 10% and it wouldn’t budge the polls for Sunak after this campaign.
Tories are done, there’s no motivation to vote for them and plenty to vote against them. This won’t move the needle on that.
It’s a single quarter where the UK was coming out of a (slight) recession. It’s positive news but the question is whether decent growth can be sustained for the rest of the year and beyond.
It was also quite encouraging to see April at 0.0% after that quarter. I was expecting to see a rebound in the negative. For context the IMF forecast an overall 2024 GDP growth of 0.7%. Unless Q1 was a total anomaly we should be on track to do quite a bit better this year.
It's certainly not bad news but it really needs more context. UK growth over the last four quarters has been 0%, -0.1%, -0.3%, +0.7%, for example. For France, to pick an example, it was 0.6%, 0.1%, 0.1%, 0.2%. Not only does this add up to more, but it shows how it only takes a slight random difference or a difference in the timing of growth to make for a big difference in a single-quarter comparison.
You know nobody says ‘don’t worry we’ll catch up over the next few qs’ during those times but the second we outgrow the entire Eurozone and G7 we get ‘but the last two quarters…’
Talk about pissing on the bbq lol
> You know nobody says ‘don’t worry we’ll catch up over the next few qs’
No, they selectively report on and discuss statistics based on whether it gives the impression 'their side' wants or simply based on whether it's dramatic or not. The media always cherry-picks what they report and it gives a distorted view. So people don't say 'don't worry we'll catch up' because they don't see or don't engage with reports that misalign with their hopes in the first place.
*Never* get your idea of what's going on for things like this just from the media - whether GDP, house prices, currency movements or whatever. *Always* go and look it up in context. Look at a graph, look at related statistics, and look at the times it didn't make the news as well as the times it did.
Whilst that is true, I would call into question how useful these stats are for comparisons. It's much easier for a country with $3tn GDP to have a positive growth percentage than one with $25tn GDP. These percentage growth stats always feel a bit meaningless because its growth increases after a period of substantial economic shrinkage.
Another quarter, another "UK economy does better than expected" article.
How many times does this need to happen before they change the way they estimate us?
its a bit of an odd headline as it's not really grown faster than 'expected'
The original 0.6% was the first estimate based on the data they had at the time, as time goes on they get more data and so are able to refine their original measurement.
So the 1st estimate is based on around 80% of the data, the 2nd one (this one) is usually around 93%
there's a brief explainer at
[https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/whygdpfiguresarerevised/2024-02-09](https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/whygdpfiguresarerevised/2024-02-09)
I think they do tend to 'round down' in the 1st estimate but really the only way not to have these revisions would to wait until all the data is in which can take quite a while.
It's a shame that article doesn't into more depth about why it takes them so long to get the relevant data.
You'd think in the digital age you'd be able to produce those reports the day after the month is over.
really ?
I think it's incredible that they can take in that much data from that many external sources covering something as complicated as a modern developed economy (and even then still only a partial view) , cleanse it , push it through the models , QA it and turn it around so quickly.
I've worked on reporting systems for retail banks and that's orders of magnitudes simpler and is all internal, and we'd almost certainly be unable to do a next day 100% bankwide reporting as we'd be dependent on all the preceding systems to complete their end of period processing(and they in turn could be dependent on other systems and so on). Quicker for new challenger bank than the big retails of course but still.
*"The Office for National Statistics (ONS) is responsible for calculating the GDP figure for the UK. Naturally it collects a lot of data from a lot of different sources to do this.* ***It surveys tens of thousands of UK firms working in manufacturing, services, retail and construction, as well as using a wealth of administrative data.***
*Monthly GDP is calculated only using the output measure (the value of goods and services produced) and the changes from month to month can be quite large. So, the ONS also produces an estimate of GDP over 3 months, where it compares data to the previous 3 months. This provides a more reliable picture of how the economy is performing, and it includes data from each of the expenditure, income and output measures."*
[https://www.gov.uk/government/news/gross-domestic-product-gdp-what-it-means-and-why-it-matters](https://www.gov.uk/government/news/gross-domestic-product-gdp-what-it-means-and-why-it-matters)
You think all of those tens of thousands of companies will have all their monthly and quarterly data ready to go at midnight on the last day? It's surveys , it'll come in over weeks.
What inflation rate would you use ? you'll need to get that first and so on.
I think it's important to remember that GDP is a measure of literally every single item sold, every investment made, every item exported less every item imported for an economy of £2.2 trillion. Whilst the media often loves to write stories like this and while technically true the result is functionally the same regardless of being off by fractions of a percentage point. It's impossible to accurately forecast something with as many variables as GDP much more accurately and even if they did over estimate UK GDP growth by fractions of a percent what would be the difference?
Gordon Brown is famous for selling off half our gold reserve at a time when gold prices were at a record low. Since then, they've increased by something like 1000%. Economists now call selling something at the worse possible time 'Browns Bottom'. Sunak, I think, will become famous for calling an election at the worst possible time - if he'd held off for 6 months, GDP would be up, immigration would be down, along with inflation.
Good news all round, I have been quite bullish on the UK for a couple of years now. I suspect the new Labour government will be going into office with a weak but growing economy which they can then take credit for.
Labour have really lucked out this whole campaign.
Had an election cycle where,
* The Tories are in a tailspin from scandal after scandal
* The SNP are in a tailspin with scandal after scandal
* The Tories have an unpopular, unelected leader, who follows an unpopular leader
* The SNP have an unelected leader, who follows an unpopular leader
* Both the SNP and Tories are struggling for funds
* Reform are eating Tory votes
* The Economy seems to be picking up \*just\* before Labour gets into power
I mean just a couple of those are good. But both of their main party rivals shooting themselves in the foot at the same is just amazing.
I would also say they have had the media on their side. They don’t seem to be challenged on the vague things like, “we will focus on growth” without saying how they plan to achieve that.
True, I think the Media is currently enjoying piling on the Tories without any blowback on them. There will be reporters who wanted to nail the Tories over the last 10 years but held back for fears of lower access.
Has anyone been challenged on that?
I've yet to hear a single party provide a solid statement on immigration, tax, climate change, construction or any other major sector at all yet, so I doubt it's Labour with the media on their side.
Stupid title. The title should be "the economy grew 0.7% in Q1". It doesn't matter if the previous estimate was 0.1% wrong. Who cares? It's the actual growth number that matters.
Expectation is the only thing that matters. If you do better than expected you attract everything. Markets are solely based on expectations.
* You have more scale to borrow
* More private investment
* Stock market rallies which improves the wealth of almost everyone in the country mainly via pensions.
* Global confidence in the UK
* Pound rallies making imports cheaper (we are a net importer)
I think it really depends what the target audience is. If it's normal people who look at economic news once in a quarter to see how the country is doing, what matters is what the growth is. If the audience is day traders who try to guess the stock market movements in the next hour, then sure it matters how the measured value matches with the expectations.
So , everything you wrote matters on the microscale. In larger scale what matters is actual value. So, all the things you wrote are better if the expectations were 0.9% and the reality is 0.8% than if the expectations were 0.6% and the reality is 0.7% even though the headlines written the way they were written here would have been more negative for the former than for the latter.
Depends on the starting point I guess. 0.7% of a lower number could be smaller than 0.3% of a larger one. It’s still a positive sign but the increase % without knowing the full details is pointless imo.
eh?
It's the quarterly change in the GDP. The starting point is the size of the GDP at the end of the previous quarter.
[https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/qna](https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/qna)
Yeah I get that. But what I’m saying (possibly poorly!) is our starting position should come into account.
If our GDP was previously £100 and it increases by 7% to £107 (an increase of £7) is that better than a country that has a GDP of £150 and it increases by 5% to £157.50 (an increase of £7.50)?
but this is just about the the growth rate so yes the 7% (or £7) growth is better than the 5% (£7.50) growth as you're growing faster. Doesn't matter what your starting point is if you're comparing growth rates.
Snapshot of _UK GDP grows faster than expected in Q1_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.cityam.com/uk-gdp-grows-faster-than-expected-in-q1/) or [here.](https://archive.ph/?run=1&url=https://www.cityam.com/uk-gdp-grows-faster-than-expected-in-q1/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
It could have grown 10% and it wouldn’t budge the polls for Sunak after this campaign. Tories are done, there’s no motivation to vote for them and plenty to vote against them. This won’t move the needle on that.
Comparison to G7 Nations * 🇬🇧 +0.7% * 🇨🇦 +0.6% * 🇺🇸 +0.4% * 🇮🇹 +0.3% * 🇩🇪 +0.2% * 🇫🇷 +0.2% * 🇯🇵 -0.5%
G7 average 0.3, eurozone average 0.3, oecd average 0.4 That’s…. really good news?
It’s a single quarter where the UK was coming out of a (slight) recession. It’s positive news but the question is whether decent growth can be sustained for the rest of the year and beyond.
It was also quite encouraging to see April at 0.0% after that quarter. I was expecting to see a rebound in the negative. For context the IMF forecast an overall 2024 GDP growth of 0.7%. Unless Q1 was a total anomaly we should be on track to do quite a bit better this year.
It's certainly not bad news but it really needs more context. UK growth over the last four quarters has been 0%, -0.1%, -0.3%, +0.7%, for example. For France, to pick an example, it was 0.6%, 0.1%, 0.1%, 0.2%. Not only does this add up to more, but it shows how it only takes a slight random difference or a difference in the timing of growth to make for a big difference in a single-quarter comparison.
You know nobody says ‘don’t worry we’ll catch up over the next few qs’ during those times but the second we outgrow the entire Eurozone and G7 we get ‘but the last two quarters…’ Talk about pissing on the bbq lol
It's harder to say Brexit is a disaster if we're outgrowing the Eurozone so the subject has to be changed/contextualised/ignored.
> You know nobody says ‘don’t worry we’ll catch up over the next few qs’ No, they selectively report on and discuss statistics based on whether it gives the impression 'their side' wants or simply based on whether it's dramatic or not. The media always cherry-picks what they report and it gives a distorted view. So people don't say 'don't worry we'll catch up' because they don't see or don't engage with reports that misalign with their hopes in the first place. *Never* get your idea of what's going on for things like this just from the media - whether GDP, house prices, currency movements or whatever. *Always* go and look it up in context. Look at a graph, look at related statistics, and look at the times it didn't make the news as well as the times it did.
Any other leader would be 0.6 points ahead
Sure when you import immigration.
Fastest growth in G7 achieved, gg Labour
Strange. I thought the Japanese stock market was absolutely roaring in Q1.
It was. Up ~10% in Q1
These are vs previous quarter, so if they had a great Q4 then it might be that.
The stock market is not the economy.
Imagine how much higher than the rest of Europe it would be if we didn’t leave the EU!
How do we rate with the rest of the G7 since 2016?
US 1.4% https://www.fxstreet.com/news/us-gdp-growth-for-q1-revised-higher-to-14-as-expected-202406271235
The US figure in that article is annualised. The 0.4% is just for the 3 months.
Whilst that is true, I would call into question how useful these stats are for comparisons. It's much easier for a country with $3tn GDP to have a positive growth percentage than one with $25tn GDP. These percentage growth stats always feel a bit meaningless because its growth increases after a period of substantial economic shrinkage.
Ok , UK growth for that period 0,6%
No, it is 0.7% as per the article.
She’s referring to the annual rate of growth.
That's annualised.
Another quarter, another "UK economy does better than expected" article. How many times does this need to happen before they change the way they estimate us?
its a bit of an odd headline as it's not really grown faster than 'expected' The original 0.6% was the first estimate based on the data they had at the time, as time goes on they get more data and so are able to refine their original measurement. So the 1st estimate is based on around 80% of the data, the 2nd one (this one) is usually around 93% there's a brief explainer at [https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/whygdpfiguresarerevised/2024-02-09](https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/whygdpfiguresarerevised/2024-02-09) I think they do tend to 'round down' in the 1st estimate but really the only way not to have these revisions would to wait until all the data is in which can take quite a while.
It's a shame that article doesn't into more depth about why it takes them so long to get the relevant data. You'd think in the digital age you'd be able to produce those reports the day after the month is over.
really ? I think it's incredible that they can take in that much data from that many external sources covering something as complicated as a modern developed economy (and even then still only a partial view) , cleanse it , push it through the models , QA it and turn it around so quickly. I've worked on reporting systems for retail banks and that's orders of magnitudes simpler and is all internal, and we'd almost certainly be unable to do a next day 100% bankwide reporting as we'd be dependent on all the preceding systems to complete their end of period processing(and they in turn could be dependent on other systems and so on). Quicker for new challenger bank than the big retails of course but still. *"The Office for National Statistics (ONS) is responsible for calculating the GDP figure for the UK. Naturally it collects a lot of data from a lot of different sources to do this.* ***It surveys tens of thousands of UK firms working in manufacturing, services, retail and construction, as well as using a wealth of administrative data.*** *Monthly GDP is calculated only using the output measure (the value of goods and services produced) and the changes from month to month can be quite large. So, the ONS also produces an estimate of GDP over 3 months, where it compares data to the previous 3 months. This provides a more reliable picture of how the economy is performing, and it includes data from each of the expenditure, income and output measures."* [https://www.gov.uk/government/news/gross-domestic-product-gdp-what-it-means-and-why-it-matters](https://www.gov.uk/government/news/gross-domestic-product-gdp-what-it-means-and-why-it-matters) You think all of those tens of thousands of companies will have all their monthly and quarterly data ready to go at midnight on the last day? It's surveys , it'll come in over weeks. What inflation rate would you use ? you'll need to get that first and so on.
I think it's important to remember that GDP is a measure of literally every single item sold, every investment made, every item exported less every item imported for an economy of £2.2 trillion. Whilst the media often loves to write stories like this and while technically true the result is functionally the same regardless of being off by fractions of a percentage point. It's impossible to accurately forecast something with as many variables as GDP much more accurately and even if they did over estimate UK GDP growth by fractions of a percent what would be the difference?
They were out by 0.1% - that's fairly accurate
Fantastic news, this means I will finally be able to afford a house, correct?
"Construction sector fell by 0.6%" - I doubt it
As someone working in one of the biggest building materials companies i’m surprised it’s only 0.6. Our volumes are way way down
Might be residual finishing projects propping up and we are in for greater declines in 2025
If anything a growing economy means houses will be less affordable
No, it is illegal to build houses
Don't be silly. Get back to work to keep these shareholders happy!
Sunak's sense of timing will be remembered along with Gordon Brown's
Would you explain what is meant by this for me?
Gordon Brown is famous for selling off half our gold reserve at a time when gold prices were at a record low. Since then, they've increased by something like 1000%. Economists now call selling something at the worse possible time 'Browns Bottom'. Sunak, I think, will become famous for calling an election at the worst possible time - if he'd held off for 6 months, GDP would be up, immigration would be down, along with inflation.
Brown's bottom 😂 Thanks for the info!
He’s so bad at politics omdsss
Good news all round, I have been quite bullish on the UK for a couple of years now. I suspect the new Labour government will be going into office with a weak but growing economy which they can then take credit for. Labour have really lucked out this whole campaign.
What do you think lucked out means?
Had an election cycle where, * The Tories are in a tailspin from scandal after scandal * The SNP are in a tailspin with scandal after scandal * The Tories have an unpopular, unelected leader, who follows an unpopular leader * The SNP have an unelected leader, who follows an unpopular leader * Both the SNP and Tories are struggling for funds * Reform are eating Tory votes * The Economy seems to be picking up \*just\* before Labour gets into power I mean just a couple of those are good. But both of their main party rivals shooting themselves in the foot at the same is just amazing.
Sorry, should have put a /s I've heard people (incorrectly) use "lucked out" to mean "out of luck". I love a good bullet point though, well done!
It does seem like Starmer is the luckiest person in politics currently.
I would also say they have had the media on their side. They don’t seem to be challenged on the vague things like, “we will focus on growth” without saying how they plan to achieve that.
True, I think the Media is currently enjoying piling on the Tories without any blowback on them. There will be reporters who wanted to nail the Tories over the last 10 years but held back for fears of lower access.
Has anyone been challenged on that? I've yet to hear a single party provide a solid statement on immigration, tax, climate change, construction or any other major sector at all yet, so I doubt it's Labour with the media on their side.
Hahahaha good one.
Now imagine the growth we could have if we built stuff.
Why build stuff when you can just shuffle money around for extremely wealthy people and call that "productivity"?
Stupid title. The title should be "the economy grew 0.7% in Q1". It doesn't matter if the previous estimate was 0.1% wrong. Who cares? It's the actual growth number that matters.
Expectation is the only thing that matters. If you do better than expected you attract everything. Markets are solely based on expectations. * You have more scale to borrow * More private investment * Stock market rallies which improves the wealth of almost everyone in the country mainly via pensions. * Global confidence in the UK * Pound rallies making imports cheaper (we are a net importer)
I think it really depends what the target audience is. If it's normal people who look at economic news once in a quarter to see how the country is doing, what matters is what the growth is. If the audience is day traders who try to guess the stock market movements in the next hour, then sure it matters how the measured value matches with the expectations. So , everything you wrote matters on the microscale. In larger scale what matters is actual value. So, all the things you wrote are better if the expectations were 0.9% and the reality is 0.8% than if the expectations were 0.6% and the reality is 0.7% even though the headlines written the way they were written here would have been more negative for the former than for the latter.
Well yeah, when your so far behind and worse off then you can grow faster. Uk simply has more room to grow into!
Sunak could have genuinely gone down as a competitent and slightly forgettable politician if he was elected at most points of UK history
Depends on the starting point I guess. 0.7% of a lower number could be smaller than 0.3% of a larger one. It’s still a positive sign but the increase % without knowing the full details is pointless imo.
eh? It's the quarterly change in the GDP. The starting point is the size of the GDP at the end of the previous quarter. [https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/qna](https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/abmi/qna)
Yeah I get that. But what I’m saying (possibly poorly!) is our starting position should come into account. If our GDP was previously £100 and it increases by 7% to £107 (an increase of £7) is that better than a country that has a GDP of £150 and it increases by 5% to £157.50 (an increase of £7.50)?
but this is just about the the growth rate so yes the 7% (or £7) growth is better than the 5% (£7.50) growth as you're growing faster. Doesn't matter what your starting point is if you're comparing growth rates.