UK economy up 0.5% since Brexit vote, Nissan to build new Qashqai in Sunderland – as it happened

Economist Rupert Seggins has tweeted a nice graph, showing how uncertainty spiked after the referendum,but has been dropping to less jittery levels since.

Today’s Q3 growth report is only ‘preliminary’, as it’s mainly based on data from July and August.

That makes it harder to predict, says Jeremy Cook of World First:

Surveys are suggesting a number between 0.1% and 0.4% with consensus estimates looking for a figure of around 0.3% but this is the muddiest figure we will have seen in a while given the collapse in expectations in July and the rebound in August.

Manufacturing may be optimistic but services are not sharing in that joy.

The pound has dropped by almost half a cent this morning, to $1.2202, as traders await the UK GDP report.

Just 45 minutes until we get the UK GDP report for the last quarter!

Bloomberg’s Maxime Sbaihi predicts it will get a mixed reception:

Although the City consensus is that UK growth fell to 0.3% in the last quarter, some forecasts are plumping for a rosier +0.4%.

Ross Finley of Reuters has the details:

HSBC are in the camp predicting that UK growth dipped to 0.3% in the last three months.

But they aren’t ruling out a higher figure, saying:

“The U.K. economy has held up in Q3, defying expectations of a pronounced uncertainty-driven slowdown following the referendum.

Given fairly robust indicators, our forecast is for growth of 0.3% qoq, with risks to the upside.”

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Christine Lagarde, the head of the International Monetary Fund, has warned that the uncertainty over Brexit is bad for the economy.

Speaking on Bloomberg, Lagarde says firms want to know whether London-based banks will lose their rights to ‘passport’ services across the EU single market.

Britain’s future trade deals are another question mark, making it harder for companies to invest and create jobs.

This uncertainty is “not healthy”, says Lagarde.

But she does welcome the government’s commitment to trigger article 50 by the end of March 2017.

One thing we know now is the timetable.

So for the next two and a half years nothing changes, but everything is changed.

Don’t get too excited if today’s GDP report shows that the economy is still growing, says Kathleen Brooks, research director at City Index.

She predicts that consumer spending will provide the bulk of the growth in the last quarter, as industry and construction struggles over the summer

Industrial production has fallen sharply in recent months; it fell by 0.4% in August. Construction is facing a steeper decline, the latest Office for National Statistics data on construction output has fallen 2% since June.

In contrast, the service sector PMI bounced back after a sharp decline in service sector sentiment in July. We expect this pattern to be repeated in the Q3 GDP report.

And Brooks also fears that 2017 will be tough, as higher inflation eats into real wages.

The Bank of England has slashed its growth forecasts for 2017 to a mere 0.8%, compared with 2.2% for 2016. Consultancy firm PWC is forecasting a gloomier outcome at 0.6% for 2017.

The biggest risk for UK growth is a sharp slowdown in business investment that could become more pronounced in the coming months, once the UK government has triggered Article 50. If the UK looks set to lose its access to the single market, then we may see the consumer show signs of stress, which could knock the UK economy seriously off course, and potentially plunge us into recession.

Today’s GDP figures are the most eagerly awaited since the British economy returned to growth four years ago.

Eric Lascelles, chief economist at RBC Global Asset Management, says.

“This is an extremely high stakes report – the British economy appears to have been surprisingly resilient to the Brexit upset.

“To be clear, some economic damage is still expected, if not of a recession-inducing magnitude.”

That’s via Bloomberg, who reckon the report will “swing the mood of consumers and provide a tool for politicians pushing their view on how tough to be when it comes to actually removing the U.K. from the EU”.

Good morning.

We’re about to find out how well, or badly, Britain’s economy fared in the immediate aftermath of June’s historic vote to quit the European Union.

At 9.30am, the Office for National Statistics will whip the official growth figures for the third quarter of this year out of its hat.

And we’re expecting to learn that the economy slowed sharply in the July to September quarter. But, GDP probably didn’t go into reverse, despite fears that a Brexit vote would trigger an immediate recession.

Economists predict that the quarterly growth rate probably slowed to around 0.3%, or perhaps 0.4%, down from a healthier 0.7% in the April-June quarter.

That would mean that Britain’s economy has been growing for 15th consecutive quarters.

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The breakdown of the GDP report will also show how the service sector, manufacturers and construction firms all fared during the last quarter.

The figures are likely to shift the pound, and move the stock markets, especially if growth is markedly stronger or weaker than the City expects.

Other data released since June has suggested that the economy has taken the uncertainty pretty well, with the unemployment rate sticking at 4.9% and consumer spending resilient.

As RBC Capital Markets put it:

It does seem that the impact of the referendum won’t have been as immediate as we and many others had initially expected.

But, the true impact of Brexit will be seen over years, of course, not months, as Robin Bew of the Economist Intelligence Unit tweets:

GDP is obviously the main event. But we’ll also keep an eye on financial results from Barclays and Deutsche Bank, plus cider maker C&C, retailer Debenhams and telecoms group BT.