Macro of the Week – UK GDP sees marginal improvement

The NIESR GDP growth estimate for the 3 months to March was revised up to 0.2% from 0.1% in February, having been revised down from 0.3%. However the figure is still a reduction from the 0.4% growth seen in Q4 2017. Quarterly growth of 0.2% equates to just 0.8% annual growth. According to Amit Kara, head of UK macroeconomic forecasting at NIESR, the main reason for the weakness was severe weather – known as the ‘Beast from the East’ – in March which “is likely to have disrupted activity in all major sectors of the economy”, denting growth in spite of a “small offset” from increased industrial production thanks to the Fortis oil pipeline shutdown, the conduit for a major chunk of North Sea oil production. It may be the case that spending has been pushed back from Q1 to Q2, which would see a boost in the coming quarter. The latest consensus of City forecasts released by the Treasury is for 1.5% growth in 2018, down from an already anaemic figure of 1.7% in 2017.