FRANKFURT (Dow Jones) – The ranks of GDP releases of the major industrial countries began on Tuesday with an unpleasant surprise. (Photo: Reuters)
Britain’s gross domestic product (GDP) declined from the previous quarter by 0.5% while the Dow Jones Newswires survey of analysts had forecast a rise of 0.4%. In the third quarter, an increase was reported by 0.7%. Compared to the same period, GDP grew by 1.7% in the fourth quarter, after growth of 2.7% in the third quarter. Economists had expected an increase of 2.6% over the year. The pound and the London stock market gave the morning after strong.
National Statistics said the first fall in GDP since the third quarter of 2009, especially with the severe winter weather in December. The heavy snowfalls have affected mainly the services sector, but also the construction industry, it said. Without the impairment by the onset of winter, the economic performance in the fourth quarter after the presentation of a statistician would have been constant. Economists expressed their disappointment to skepticism about the data, but were confident that the second card GDP will be positive.
"The business surveys – even those for December – suggests not remotely indicate a weakness in GDP, as reported here," complained Citigroup economist Michael Saunders. Saunders pointed out that the British GDP data were released relatively early, which often prefer to be strong revisions. If National Statistics barely subject data for December, in which the heavy snow cases occurred. Moreover, are data in the construction industry, for a minus of 3.3% was reported, have been very volatile recently.
ING economist Rob Carnell well-expressed view of the next release will hope for an upward revision. "The first GDP figures are based on a fairly narrow range of production indicators, and it is likely that the next time pending use-side data will look less weak," he said. could nevertheless warned Carnell, take that with so weak data, the concerns about the impact of government cost cutting program and the incentives for investments in pounds disappear. The pound depreciated against the dollar in the morning from 1.5900 to £ 1.5750 from / USD, the FTSE 100 lost 0.8%.
Simon Hayes of Barclays Capital warned against pinning too much hope for an upward revision in second publication. Although revisions are quite common, but they fell by 0.1 to 0.2 percentage points is usually not very high, so that one can ignore the current GDP estimate is not easy, he argued, adding: "Even by statisticians brought into play weather-adjusted GDP stagnation questions about the sustainability of the economic recovery would raise. "
By Hans-Bentzien, Dow Jones Newswires, +49 (0) 69 29725 300
Hans.Bentzien @ dowjones.com
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