Revised estimates of GDP in the final quarter of 2008 for the US and UK are published this week, with both likely to lead to downward revisions to economic growth.
Data to show faster pace of contraction in US and UK in Q4 2008
Revised estimates of GDP in the final quarter of 2008 for the US and UK are published this week, with both likely to lead to downward revisions to economic growth. The least uncertainty surrounds the US, which could show an annualised contraction of over 5% compared to a surprisingly ‘modest’ 3.8% decline in the preliminary estimate last month. In the UK, weaker than expected industrial output data suggest the economy contracted by 1.6% in Q4 2008 compared to 1.5% in the previous estimate. The first view of the expenditure breakdown will be keenly awaited. We also expect confirmation that the German economy contracted by 2.1% in Q4 2008. Recent indicators suggest large declines in GDP are again likely in the first quarter of 2009 for most economies, leading to a raft of official efforts to limit the impact on their struggling economies. We will hear more about these measures and the economic outlook from a series of central bank speakers this week, including Fed chairman Bernanke, ECB president Trichet and BoE governor King. Financial markets will also be influenced by corporate earnings updates and another heavy week of bond issuance in the US.