UK GDP and the Olympics

Posted by on Jul 27, 2012 in Commentary, Events, Featured, Market News, News

UK GDP and the Olympics

UK GDP figures show a third consecutive quarter with the economy shrinking, or as the official term goes, negative growth. The quarter on quarter drop of 0.7% was far greater than the 0.2% anticipated by the markets. Naturally, the value of sterling fell after the announcement.

I don’t know about you, but I have some sympathy for those claiming the weather slowed the economy down. With the wettest April and June for more than a century, it was hardly surprising that construction output fell. I can just imagine all of the muddy waterlogged building sites at a virtual standstill.

I have not seen any figures for agricultural output, but I can imagine this was another area of the economy to falter. I recall listening to a piece on Radio 4 talking about the pea harvest and the additional costs being involved in extricating expensive machinery out of the bogs that used to be fields. In my own garden, many crops are late or have simply given up.

And the extra bank holiday, yes it was 1 day out of 91 in the quarter where output was other than normal. Now, we have the Olympics about to start and who knows what impact that will have on next quarters GDP figures. I must say it was easy getting a restaurant reservation for tonight.

This suggests that whatever the positive impact of the Olympics on next quarters GDP, there will be compensating factors. With additional visitors here for the Olympics, there are probably as many nationals that have left to escape the crowds and the British summer. I won’t be guessing the next set of figures, but I’ll be anticipating them all the same.