Analysts at RBC Capital Markets predict the UK economy shrank around 4.7% in January, sharper than in November’s lockdown.
The November lockdown caused a 2.3% contraction in monthly GDP. All of our preferred high-frequency indicators are consistent with the current lockdown having a much larger impact on activity than the November one.
We thus forecast UK January GDP falling 4.7% m/m due to the lockdown, but still considerably less than seen in spring 2020 during the first lockdown.
Introduction: January UK GDP released today
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After a record slump in 2020, we’re about to discover how the UK economy fared at the start of 2021.
January was a tough month economically, with England entering its third national lockdown and tight restrictions in other parts of the country too. Businesses also had to get to grips with the UK-EU free trade deal, agreed just before Christmas.
Economists predict that the UK economy shrank by almost 5% during January, having returned to growth in December. A sharp decline, but not as severe as the 20% plunge suffered back in April.
Most of the damage was probably suffered by services sector companies, with industry and construction managing to keep operating despite the lockdowns.
We also get new UK trade data, which is expected to show a decline in imports and exports in January following a burst of stockpiling late last year. Germany reported earlier this week that its trade with the UK plummeted in January, with imports from Britain more than halving.
Plus, there’s new factory production data from the eurozone and a healthcheck on US consumer confidence to round off the week…
- 7am GMT: UK GDP report for January
- 7am GMT: UK trade figures for January
- 10am GMT: Eurozone industrial production for January
- 2pm GMT: NIESR’s monthly UK GDP tracker for February
- 3pm GMT: University of Michigan survey of US consumer confidence