Economic Indicators, June 2011

The ONS confirmed its preliminary estimate of GDP growth of 0.5% in Q1 2011 compared with the previous quarter. An expenditure breakdown of GDP was available for the first time and showed that consumer spending (which makes up over 60% of GDP) fell by 0.6% over the quarter. Investment also fell, while net exports (exports minus imports) rose sharply. The weak GDP growth figures over Q4 2010 (when GDP fell by 0.5%) and Q1 2011 have led the OECD and IMF to downgrade their forecasts for GDP growth in 2011 to 1.4% and 1.5%, respectively, and below the OBR’s March forecast of 1.7%.