UK 2011 Nominal GDP
With the second estimate of UK 2011 Q4 GDP growth now published, we have the first estimate of nominal growth in that quarter, and of annual nominal GDP in 2011.
Looking at the (seasonally adjusted) annualized quarterly growth rates in Q4, NGDP growth was very weak at 1.9%; with the deflator growth at 2.6% we are left with a 0.7% fall in real GDP.
UK Quarterly Growth Rates, % SAAR
For the year as a whole we have an estimate of 3.1% NGDP growth against a 2.3% deflator:
UK Annual Growth Rates, %
Finally, here’s the picture of the “hole” – this projects out the 1997-2006 NGDP trend growth rate of 5.3% – in 2011 Q4 we are now 13% below the trend line:
UK Nominal GDP, Annualized £billions SA
(It is arguable whether the trend should be chosen to 2007 or 2006 but the results are similar in either case.)
The underlying data can be found in ONS series YBHA (current price GDP) and YBGB (GDP deflator).
So NGDP had begun to collapse at the start of ’08, after Northern Rock but before RBS. So why did it start then? The banking crisis had begun already but not fully played out, and housing had been falling already for a year or so.