UK DATA: Preliminary Q4 GDP -0.5% q/q; +1.7% y/y…..

UK DATA: Preliminary Q4 GDP -0.5% q/q; +1.7% y/y
–NS: With no bad weather GDP would have been flat q/q
–Median forecast: +0.4% q/q; +2.6% y/y
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GDP plunged 0.5% q/q in Q4 well below the median for a rise of 0.4%
q/q. NS said that the cold weather during the quarter had hit growth
hard and that without the weather growth would have been flat although
they cautioned that the data was more prone to revision than usual this
quarter. Services growth fell 0.5% q/q with transport, distribution and
business services and finance all hit hard. Construction also declined
sharply by 3.3%. Overall the date will reduce expectations for an early
tightening in policy which had been gaining ground and strengthen the
position of doves such as MPC’s Adam Posen who continues to favour
further QE. Still, the data are preliminary and it will not be until the
revised data next month and the Q1 data that we gain a clearer picture.