DAVY VIEW

This morning’s UK GDP release shows the economy had a little less momentum during the summer, with GDP up 1.1% in Q3 2021 rather than the 1.3% first estimated. This will only add to concerns the recovery faltered in Q4, with GDP up just 0.1% in October and December’s Services PMI falling to 53.2, a 10-month low, as firms began to see consumer demand hit by fresh COVID-19 restrictions. In this context, the consensus forecast for UK GDP to grow by 7% in 2021 and 4.7% in 2022 may well be revised down.