The UK Economy Cools Off in August, as the GDP Report Confirmed Today
The UK economy was growing at an impressive pace in June and July, after the reopening, posting a combined expansion of 40% in those two months. But today’s GDP report for August showed a slowdown to 2.1%, falling short of the expectations of 4.6%. Manufacturing and industrial production also cooled off much more than expected. The GBP trembled for some time, and it is slightly lower now.
Latest data released by ONS – October 9, 2020
- August monthly GDP +2.1% vs +4.6% expected
- July GDP was +6.6%; revised lower to +6.4%
- GDP 3M/3M +8.0% vs +8.2% expected
- Prior was -7.6%; revised to -6.8%
The headlines missed estimates by quite a bit, and for some context on the level of economic activity, the UK GDP for August was down by 9.3% compared to the same month a year ago. This just further underscores the challenges the economy is currently facing, and that the economic rebound in Q3 may not be as robust as anticipated.
Add to that the concerns regarding the current coronavirus situation, Brexit risks and the furlough program that expires at the end of the month, and things could get dicey towards the end of the year.
- Manufacturing production +0.7% vs +3.0% m/m expected
- Prior +6.3%
- Manufacturing production -8.4% vs -5.9% y/y expected
- Prior -9.4%
- Industrial production +0.3% vs +2.5% m/m expected
- Prior +5.2%
- Industrial production -6.4% vs -4.7% y/y expected
- Prior -7.8%
- Construction output +3.0% vs +5.0% m/m expected
- Prior +17.6%
- Construction output -13.0% vs -9.2% y/y expected
- Prior -12.7%
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