UK Q3 GDP Preview: GDP set to triple the first quarter, but the £100K prize is offered to kick-start the economy

• The UK third-quarter GDP is set to rise 0,6%, up from 0.4% in the second quarter and 0.2% in the adverse weather-hit first quarter of 2018.
• Third quarter GDP is expected to rise even as the manufacturing slump is expected to subtract from the growth.
• With stagnant investment affected by Brexit uncertainty, it is consumers and net trade that is expected to safeguard the UK economy as it enters the crucial phase of Brexit negotiations.
• The super prize worth  £100K is offered to the economist proposing the most progressive model for the UK economy.

The third-quarter UK Gross Domestic Product (GDP) growth rate is expected to see the first quarter’s rate triple while rising 0.6% over the quarter, the Office for National Statistics is scheduled to report on Friday, November 9 at 9:30 GMT. When compared to a year ago, the UK Q3 GDP is expected to increase by 1.5%, up from 1.2% growth rate in the first half of this year.

The acceleration of the UK GDP growth rate is expected to be driven by consumption and net trade as business investment and manufacturing slowdown are depressed by Brexit uncertainty. 

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• Manufacturing set to subtract from UK GDP

While the broad-based growth is settling in, the UK economy still remains the good news for the UK Prime Minister Theresa May at times of heated Brexit negotiations with the European Union. Apart from that, the UK economic growth is relatively low compared with the average of the growth rate estimated for major advanced economies as Brexit uncertainties weigh on both spending and businesses investment decisions.

Should the UK GDP rise 1.5%, the current growth rate will still be below the levels estimated the Bank of England in its latest Inflation Report. The Bank of England Governor Mark Carney said during the November Inflation Report press conference that the central projection is for the UK GDP to rise by 1.8% on average from 2018-2020 as “consumption grows modestly relative to historical rates, while growth in business investment is expected to stay subdued in the near term, before rebounding as the current by the Brexit-related uncertainty wanes.”

According to Bank of England expectations, net trade is also expected to contribute positively to growth, supported by solid global growth, the lower level of sterling, should UK businesses retain a significant access to EU markets over the next few years.

In order to generate new ideas and ways how to bolster the UK´s slow growth puzzle, the  Institute for Public Policy Research launched this Wednesday a prestigious prize of £100K. The economic think-tank expects to pool “radical ideas“ from economists summarized in 5 thousand words long proposals until January 6.