UK: Q3 GDP data came in higher than consensus expectations - Fidelity

Anna Stupnytska, Global Economist at Fidelity International, comments on today’s UK GDP data.

Key Quotes

“Q3 GDP data came in higher than consensus expectations. While data continues to point to the economy’s resilience, it is still too early to read much into it. As survey evidence suggests, investment intentions have been hit following the Brexit vote and this should ultimately manifest in lower actual business investment numbers in the coming quarters.

“As we move into 217, lower real income growth on the back on higher inflation and a potentially weaker labour market dynamic should start impacting consumption. But given the easing in financial conditions on the back of the lower pound, the economy might well manage to avoid recession next year.

“Fiscal stimulus in the form of infrastructure investment and some measures to boost consumer spending and business investment, perhaps involving tax cuts, would also go some way towards limiting the Brexit fallout in the short-to-medium term.”