GDP Grows by 0.6% in Q2

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Q2 '13 GDP Growth (Preliminary Estimate): 0.6%

Average Prediction: 0.3%

Number of Correct Forecasts: 10/310

Current Greek Bond Yield Low: 8.13 (22nd May)

The Office for National Statistics today announced a preliminary estimate for Q2 GDP growth of 0.6%, much higher than our average forecast of 0.3%.  This was predominantly driven by growth in the services sector, as it was the previous quarter, but all four sectors (services, production, agriculture and construction)  grew in the second quarter of the year.  At the same time, the previous estimate for Q4 2012 GDP growth was revised upwards to -0.2% (from -0.3%).  These two announcements combined paint a positive picture of the UK economy, although it should be noted that we are still 3.3% below the peak of Q1 2008.

None of the three professors were optimistic enough to forecast 0.6% growth this past quarter, but the closest was Ethan Ilzetzki from LSE, who predicted 0.4% compared to Michael Kitson and Linda Yueh, who both forecast 0.3% growth.  This has helped Professor Ilzetzki to pull out further in to the lead in our official competition.

In our public competition, only ten people correctly forecast a growth rate of 0.6%, with more than 80% of entrants thinking growth would be lower at this point.  More than 10% of people were expecting negative growth this quarter.  

This is only a preliminary estimate, and may change a number of times before the end of the competition (but it is unlikely to change by more than +/- 0.2%), with the next opportunity coming up on 23rd August, when the second estimate is released.  Before then, we will discover the official second quarter unemployment rate on 14th August.  The average prediction was 8%, but it has been at 7.8% for the past two quarters with many expecting it to fall further.

Click here for a summary of the results so far, or here for the full standings.