In Europe a couple of weeks ago we saw eye watering drops in output in the latest Q2 GDP numbers, from the likes of Spain, where we saw a Q2 drop in output of -18.5% to Germany which saw a more modest -10.1% drop, while the US saw a -9% fall in output.
Today’s UK numbers are expected to be no less sobering, with estimates from anywhere between -15% to -25% for Q2, a big drop from the -2.2% contraction seen in Q1.
Whatever the numbers are, and they won’t be pretty, the more important question is how quickly the UK economy can bounce back, and we have seen some progress on that. Today’s numbers will cover the sharp fall seen in April, which the monthly numbers showed as a -20.4% fall, followed by a 1.8% gain in May.
This means we need to see a sharp acceleration in the June numbers, to pull the quarterly number back up into the mid-teens, given the UK’s heavier reliance on services, which could well act as a drag on the prospect of a V-shaped bounce back, due to the slow pace of the economic re-opening.