Premature celebration

It’s amazing what 40 basis points can do. Prior to 9.30 this morning the commentary on the state of the British economy was all doom and gloom.

While analysts predicted there would be GDP growth in the third quarter of the year, the expectation was for 0.4% and tough times ahead owing to the comprehensive spending review.

Fast forward after 9.30 and the announcement that GDP expanded by 0.8% in the third quarter of the year and all of a sudden economists and managers are talking down the need for a second round of quantitative easing, which until this morning many had predicted the Monetary Policy Committee would kick start this month. (article continues below)

As ever the key thing to remember is that this is a first estimate of how Britain’s economy grew in the third quarter. However in the recent past the trend has been for the ONS to revise up its forecast, rather than cut it.