The analysts got this one way wrong, and the return to growth will have to wait at least one more quarter in the UK. Expectations were for slight growth, but the British economy actually shrank .4% in Q3.
That sent the pound sliding and the FTSE down over 1.5%.
The Telegraph has a roundup of analyst reactions. They all sound very depressed.
James Knightley, ING
“UK 3Q09 GDP is awful with no positive news within the report … More worryingly from sterling’s perspective is the fact that the UK may be the only major economy to have contracted in 3Q09.”
Brian Hilliard, chief economist at Societe Generale
“Very disappointing, the surprise comes in services where the business surveys seem to have been a little over optimistic. So we are significantly lagging the euro zone in terms of exiting the recession.”
Peter Dixon, Commerzbank
“It’s fair to say that these figures might be an argument that the Bank of England will be using to expand the QE programme when it meets again in November. It clearly tilts the balance in favour of those who wish to expand the programme.”
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