Forecast Overview

The ONS has made substantial revisions to the historical national accounts data which have brought it closer to the story told by the labour market and business survey data. GDP is now estimated to have been 2.7% above the early‐2008 peak in Q2 2014, up from the previous estimate of just 0.2%; this means that the UK's performance was similar to that of the Eurozone, though it remains well short of the recovery enjoyed by the US. We have long argued that the recovery was stronger than the ONS had initially reported and in producing our forecasts we had allowed for the likelihood that the data would be revised up substantially. As such, these revisions have little impact on our forecasts for future periods and we expect GDP to grow by 3.1% in 2014 and 2.7% in 2015…