PwC comments on fourth-quarter GDP data

Feb 11, 2020

PwC chief economist John Hawksworth comments on today's GDP data:

"December saw a stronger than expected 0.3% bounce in GDP, recovering the ground lost in November. In the fourth quarter as a whole, this was enough to keep output flat, although the underlying trend was still for a loss of momentum in the autumn after a stronger performance in the summer. We would expect a revival in growth in the first quarter of 2020 based on improved business and consumer confidence and a stronger housing market.

For 2019 as a whole, GDP growth is estimated at 1.4% - up slightly from 1.3% in 2018 but still somewhat below trend. However, this disguises considerable volatility from quarter to quarter due to Brexit-related timing effects, with relatively strong growth in the first and third quarters, but negative or flat growth in the second and fourth quarters.

Helped by the somewhat stronger than expected growth in December, we would expect GDP growth to rise to around 0.3-0.4% in the first quarter of 2020. 

UK growth could pick up further later in the year if the global economy stabilises and progress is made on a trade deal with the EU, while the Budget provides a further boost to the economy through increased public investment. But there are still many uncertainties out there relating to Brexit, the coronavirus and global trade, so we would expect the Bank of England to keep their options open on interest rates until a clearer picture emerges."

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