Nigel Gamble 🌹

Interesting: Q3 GDP number was a tiny fraction of a per cent away from being 0.8%… about £37m away from registering officially best quarterly growth outside pandemic since 2017… it’s basically 0.75% Also some people were asking about per capita. It was 0.7% per capita. At 0.6, 0.5, 0.7 this year, that is the strongest three-quarter per capita GDP growth outside of pandemic rebound since 2017. Others were rather curiously suggesting this growth is all government spending. This is not the case in any of the data today. 2026 data shows growth in private sector business investment especially driving GDP growth, Govt share constant, now lower, as Bank of England declared and showed in a chart last week (the purple bit). “Unlike over 2022–25, when GDP growth was supported to a larger extent by rising public sector output, resilience this year has been primarily driven by the private sector, and in particular private sector services”: BoE MPR, last week. BoE study last week was seeking to measure AI influence, but actually it also constructed useful measure over time for Govt share too from this data source in the monthly GDP data: ons.gov.uk/file?uri=/economy… Latest quarterly figures are even less dependent on government contribution, and more on private sector, also true across 2026… basically a tenth or less of total growth (ie even smaller purple bit below when updated to September), same share as 2012-2019, and way lower than 2022-2025, more like a third to a half (see chart below). Also corroborated by fact Government consumption grown 1.1% this year against 1.9% for GDP (first time I can see this is lower than whole economy growth since 2022). Market-sector GVA (so ex-government), is up faster on year than whole economy. Curious to see any data basis for claiming this current better growth is government spending-led.

So… rather interesting UK Q3 GDP tomorrow morning. Average consensus forecast in June for this quarter was 0.13%. OBR forecast at Budget time suggests 0.3% (but it closed in September). Economists scrambled to upgrade to 0.6-0.7%, including the Bank of England, which would break pattern of cruel summers since Budget. Could be highest figure for 2 years, possibly 9 years if you strip out pandemic period. Heading for second fastest in G7 behind US in 2026 so far. Depends on September and any revisions, but could point to better news about UK AI capital expenditure, and resilient consumer (at least until summer) to Iran War pressures. Every quarter this year has rather considerably outperformed consensus and OBR (below is from its march forecast).