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GBP: UK Q2 GDP indifferent, unlikely to affect policy – TDS

FXStreet (Delhi) – Paul Fage, Senior Emerging Markets Strategist at TD Securities, notes that the revised 15Q2 national accounts were identical to the previously-reported GDP number (+0.7% q/q) for the UK and owing to the structural nature of these revisions, the MPC will see right through them, and they won’t affect policy in the UK.

Key Quotes

“The detailed expenditure breakdown showed that consumption remained a persistent driver of GDP growth (+0.8% q/q), but the biggest contribution came from net exports. This was not a story of resilience by Britain’s exporters (+1.9% q/q) against a stronger GBP, however, but rather came as a result of a very weak number for imports of machinery and equipment (total imports: -2.7% q/q). This release also fully incorporated the annual Bluebook revisions, with historical revisions to the dynamics of UK growth in recent years.”

“Independent from the GDP release, the Index of Services revealed an on-consensus increase of 0.2% m/m in July, slowing from the sharp 0.6% m/m increase posted in June.”

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