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News: UK GDP down by 0.3 %

Mon, 28 Jan 13

 

UK GDP fell by 0.3 per cent in the fourth quarter of 2012, according to the Office of National Statistics.

The ONS figures show that GDP was estimated to have decreased by 0.3 per cent compared to the previous quarter. Output of the production industries was estimated to have decreased by 1.8% in Q4 2012 compared with Q3 2012, following an increase of 0.7% between Q2 2012 and Q3 2012.

Construction sector output was estimated to have increased by 0.3% in Q4 2012 compared with Q3 2012, following a decrease of 2.5% between Q2 2012 and Q3 2012. Output of the service industries was estimated to have been flat in Q4 2012 compared with Q3 2012, following an increase of 1.2% between Q2 2012 and Q3 2012.

GDP was estimated to have been flat in Q4 2012, when compared with Q4 2011.

GDP is estimated to have been flat between 2011 and 2012. Users are, however, reminded that this figure is subject to revision in the second estimate of GDP when all quarters of 2012 are open for revision.

Sue Foxley, head of research at Cluttons, commented on the Q4 GDP figures:

'There is no doubt 2012 was a year of feeble growth. Markit CPIS PMI for services showed a disappointing downturn in output for December (48.7), but we forecast GDP to rise by close to 0.7% this year as we see a slow return to economic growth.

'This will certainly have an impact on the capital’s housing market as the key financial services sector enters a period of cooling and bonuses are scarcer. However, the underlying buyer demand in London remains robust, with the number of registered buyers during the first 15 days of 2013 equaling the 2012 total over the whole of January and expected to continue on an upwards path.

'Our data shows the proportion of mortgaged buyers doubled in the last year across prime Central London, while the number of cash buyers dropped by over a fifth, in part due to the cautious bonus environment and the increase in the availability of mortgages due to the Funding for Lending Scheme.'

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