UK economy probably shrank for the first time in 7 years – survey

The UK economy is forecast to have contracted in Q2 2019, according to the latest Bloomberg survey of economists

That will represent the first contraction in the UK economy since 2012 and the survey comes in as we saw a drop in retail sales yet again earlier today, with the 12-month average of total sales being the lowest on record.

Economists are now predicting a 0.1% contraction for Q2 2019, a downgrade from their earlier prediction of stagnation (0.0%) back in June.

Tomorrow, we’ll have UK monthly GDP data for May and that is expected to show a rebound of +0.3% m/m but that comes after a dismal -0.4% m/m reading in April. If the data comes in within expectations, the rough estimate for Q2 GDP to turn flat would be a +0.8% m/m reading in June – which is unfathomable.
As such, take that into consideration when looking into the release of tomorrow’s data.

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