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rantnrave

Q2 2011 Gdp

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Quote:

The chained volume measure of gross domestic product (GDP) rose by 0.2 per cent in the second quarter

(Q2) of 2011. There were a number of special events in Q2:

• The additional bank holiday for the royal wedding

• The royal wedding itself

• The after-effects of the Japanese tsunami

• The first phase of Olympic ticket sales

• Record warm weather in April

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I like the way the FT is reporting this:

BREAKING NEWS

UK economy grew just 0.2% in second quarter as industrial putput shrinks

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UP 0.2 %

As predicted which makes a nice change. A descent performance considering there was a day missing and North Sea output was hammered by maintenance issues (20% y/y decline in may). Could easily have been negative, saved by a strong service sector performance.

There has been negative growth in industrial production growth this year despite record growth in manufacturing.

The construction figures are also utter garbage and are almost certainly not measuring “output”.

Once Buzzard comes back up to 200,000 BPD and the North Sea output recovers in Q3 and Q4 Industrial production should grow more normally.

Edited by mattyfc

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So the Royal Wedding bank holiday cost us 0.5% of GDP even after the sale of lots of mini Union flags and porcelain figurines?

That damn warm weather too, it is as bad as that cold weather. Could the ONS produce an acceptable range of temperature for economic output to perform as expected in?

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BBC News front page

UK economy slows to 0.2% growth

"The growth of the UK economy slowed in the second quarter, with GDP growing by 0.2%, partly as a result of the royal wedding. "

It's a good job our royal family isn't any bigger otherwise this country would be permanently on its knees!

The article itself includes...

"The ONS said that growth had been slowed by some one-off factors such as warm weather"

Good job it p!sses it down most the time.

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That damn warm weather too, it is as bad as that cold weather. Could the ONS produce an acceptable range of temperature for economic output to perform as expected in?

The apparant "decline" due to warm weather really just exposes the major flaw in GDP methodology, namely that it counts all "activity", good or bad.

So if my son's football smashes a window that's good for GDP because someone has to pay to replace it, whereas if I turn down the heating that's bad for GDP as British Gas get less money.

In reality, of course, that's back to front.

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Cue the talk of more asset purchases/QE, interest rates staying put, and other ops to talk the pound down further

Further hoped for booster fuel for their beloved property bubble

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Index of production for manufacturing was 100.5 in Q2 2007, 92.1 in Q2 2011.

Output index for business services & finance was 105.0 in Q2 2007, 104.7 in Q2 2011.

Rebalancing the economy? Yeah, right.

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http://www.guardian.co.uk/business/2011/jul/26/uk-gdp-figures-live-coverage

Joe Grice explains that these data were affected by a range of factors: the additional bank holiday for the Royal Wedding, the Royal Wedding itself, the after effects of the Japanese tsunami, the first phase of Olympic ticket sales and warm weather in April.

The effects of these factors go into different directions, he said, but together they may have subtracted around half a percent of GDP.

Grice says: "In terms of the recession itself we have seen a flattish picture over the last six months the economy is showing some growth this quarter after a flattish picture over the last six months"

And the special factors, for example, he said hotels and restaurants grew by 2.2% but also effect in the opposite direction: a fall in gas output which may have been caused by the warm weather. Gas and electricity output fell by 3.2%.

My god even selling tickets for the Olympics cased a decline!!!!

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This is being spun big time - BBC journos falling for it.

I recall both Diana's wedding and Fergie's wedding - both apparently resulted in an upturn in spending. Looks like Kate blew it! :unsure:

BBC News already has had 'experts' on saying that more QE is required.

I expect Swansea house asking prices to rise 25% within the hour.

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Joe Grice explains that these data were affected by a range of factors: the additional bank holiday for the Royal Wedding, the Royal Wedding itself, the after effects of the Japanese tsunami, the first phase of Olympic ticket sales and warm weather in April.

My god even selling tickets for the Olympics cased a decline!!!!

:lol:

Nothing like a bit of commerce to stiffle economic growth.

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My god even selling tickets for the Olympics cased a decline!!!!

I think you'll find that this was a POSITIVE one-off effect. :rolleyes:

He does say that "the effects go in different directions".

For example, the Royal Wedding itself is POSITIVE (souvaniers etc), it's the bank holiday that was negative to GDP.

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I think you'll find that this was a POSITIVE one-off effect. :rolleyes:

He does say that "the effects go in different directions".

For example, the Royal Wedding itself is POSITIVE (souvaniers etc), it's the bank holiday that was negative to GDP.

No, it's perceived as being negative (in the sense that GDP was taken away from this quarter and will be recorded later).

Around £300m of tickets were sold, but these are treated (according to international accounting conventions) as prepayments for services. They won't be booked as household final consumption expenditure until Q3 2012 when the Olympics take place.

Edit: for clarity.

Edited by FreeTrader

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However they spin it the figures are still dire and most people, except perhaps EAs, will realise it.

In a house price context it will just mean that things will carry in regardless. Can't wait for tomorrow's Express headline.

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I think you'll find that this was a POSITIVE one-off effect. :rolleyes:

He does say that "the effects go in different directions".

For example, the Royal Wedding itself is POSITIVE (souvaniers etc), it's the bank holiday that was negative to GDP.

the Royal Wedding - already stated before as a negative

the Royal Wedding itself, - again I'd say a negative

the after effects of the Japanese tsunami, - negative

the first phase of Olympic ticket sales - I'd argue negative as people clearly sat around computers waiting for an email

and warm weather in April - warm weather in the past blamed for negative data.

I'd say all of those stated have been used in the past for excusing negative effects.

Therefore I'd say he's using weasel words and has merely offered excuses for it going wrong and added a bit of misdirection by adding in that some go in "different directions". :P

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