Gross Domestic Product (GDP) UK

Gross Domestic Product (GDP) UK
An indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish.

Due to the untimeliness of this report and because data on GDP components are available beforehand, the actual GDP figure is usually well anticipated. But given its overall significance GDP has the tendency to move the market upon release, acting to confirm or upset economic expectations. Robust GDP growth signals a heightened level of activity that is generally associated with a healthy economy. However economic expansion also raises concerns about inflationary pressures which may lead to monetary policy tightening.

The headline figure for UK GDP is an annualized percentage growth rate.

Technically, Gross Domestic Product is calculated in the following way:
GDP = C + I + G + (EX – IM)

where

C = private consumption
I = private investment
G = government expenditure
EX = exports of goods and services
IM = imports of goods and services

Technical note : GDP is the total market value of goods and services produced in the U.K. within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only.

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