David Buik's instant reaction to the 2% fall in GDP
13 May 2020, 08:03
David Buik said the GDP figures showed only a modest fall - but it's going to get much, much worse.
LBC's markets expert was responding to the new figures from the Office of National Statistics, which showed a 2% fall in the UK's economy from January to March - the worst fall in a decade.
That's not as bad as predicted - the Bank of England thought it would be 3%.
But David told Nick Ferrari that quarter 2 will look far worse.
He said: "They're terrible, but they're not as bad as expected.
"The month of March showed a figure of -5.8%. The expectations were -8%. The quarter is -2%. The services sector is down 6.2% against expectations of -8%.
"This actually looks very, very modest indeed. Wait for quarter two. It's going to be an awful lot worse. Many people feel it could be as high as -25%."
Andrew Sentance, a former member of the Bank of England's Monetary Committee said the UK's figures are not as bad as France, Spain or Italy.
However, he pointed out the UK's lockdown came later than those countries, so he agreed the figures will look much worse from April to June.
Mr Sentance said: "It's not as high as France, Italy and Spain, though GDP in the United States fell by just over 1% if you measure it in the same way as we do.
"We're somewhere in the middle of the pack. We're not the worst for the first quarter, but that's because our lockdown didn't come in until right at the end of March, so the impact of that is barely in these figures."