GDP first quarterly estimate, UK: April to June 2023

The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. It is important to note that the GDP deflator covers the whole of the domestic economy, not just consumer spending, and also reflects the change in the relative price of exports to imports. For more information on the implid GDP deflator, see our Measuring price changes of the UK national accounts: February 2023 article.

The implied price of GDP rose by 2.1% in Quarter 2 2023, which was primarily driven by higher price pressures for household consumption (1.5%) and government consumption (3.1%). The implied price of GDP was 6.7% higher in Quarter 2 2023 than the same quarter a year ago, a slight increase from growth of 6.5% in the previous quarter.

In the year to Quarter 2 2023, growth was driven by strong rises in the price of household consumption, though there was a slowing in the latest quarter of how much these prices increased. There have also been large price movements in internationally traded goods and services, where there was an easing in the implied price of imports; this contributes positively to the increase in the GDP implied deflator (Figure 2). Further information on the price movements of trade is discussed in our article, The purchasing power of GDP, UK: 2022.

Source: GDP first quarterly estimate from the Office for National Statistics