Revisions unlikely to lift the gloom

The release of the quarterly national accounts this week seems likely to receive more attention than usual. Not only will the release contain the first expenditure breakdown of Q2 GDP which would normally have been published earlier, but the older GDP figures are also likely to be revised significantly as a result of methodological improvements. It is unclear what these revisions will show. Some forecasters have speculated for a while that GDP would be revised up in time, but we are not convinced by their arguments. And even if the estimates of GDP are revised up, they would not necessarily point to less spare capacity and may even point to weaker inflation pressures ahead.