Commenting on this morning’s UK GDP data Melanie Baker, Senior Economist at Royal London Asset Management, said:
"The bounce in October GDP may have been a touch stronger than consensus expected after the extra bank holiday hit output in September, but taking September and October together paints a downbeat picture of UK economic growth going in to Q4. The level of GDP is barely above where it was pre-pandemic, part of the bounce in services output was down to vaccination and test and trace activity, and more than half the manufacturing subsectors saw declines in output.
"The UK could escape a technical recession (for now) if November and December output was flat, but falling output would be more consistent with the picture being painted by business surveys.
"With inflation as strong as it is, and despite the downbeat picture for economic activity, another Bank of England rate hike is very likely on Thursday."
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The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.