Second estimate of UK Q4 GDP should remain unrevised at 0.5% qoq: Societe Generale

Quotes from Societe Generale Cross Asset Research:

-The second estimate of UK Q4 GDP should remain unrevised at 0.5% qoq. The interest in this release will be in the expenditure breakdown. We have most confidence in predicting that household consumption growth will have surged from the 0.9% qoq recorded in Q3.

-Retail sales were strongly boosted by Black Friday and, even allowing for the greater volatility of sales than consumption (of which it is part), the latter should have reflected that strength. Moreover, the trade in goods data show a large increase in export growth relative to import growth which suggests that net exports will have made a positive contribution to growth in Q4.

-The output data still tell us that GDP growth decelerated in Q4 from 0.7% in Q3 so some other areas of expenditure must have been weaker to offset that strength. The most likely candidate is inventories because there could have been heavy destocking to meet the demand for goods on Black Friday.