Week ahead 24th April

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The main highlight this week will come on Friday, when the ONS releases the first estimate of GDP, for the opening three months of 2017.

GDP First Estimate

Following the EU Referendum result, the UK economy has shown remarkable resilience, especially considering what many were predicting in the immediate aftermath of the result. GDP came in at a solid 0.6% and 0.7% for quarter 3 and 4 respectively, while a host of other indicators - including industry PMIs, trade data and labour market data – confirmed that the economy was in fairly rude health.

However this quarter, we expect to see GDP growth slowing slightly, as some Brexit related impacts begin to take effect. Chief among these is the recent upward trajectory in inflation, as a result of the sustained depreciation in Sterling. Rising inflation is eroding household disposable income and consequentially having a negative effect on consumer spending growth, the driving force behind the economy over the past 6 months. This trend was evident in last week’s retail sales figures which were down 1.5% for the opening quarter of the year. With this trend set to intensify throughout the year, further slowing is possible later on in 2017. Keep an eye out for our blog on Friday, where we will be analysing the figures.

 

Author

Economist

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