Nowcasting UK consumption and investment with monthly output components and realtime indicators

The first ONS estimates of UK Investment and Consumption growth are revised to incorporate data that was not previously available. We draw on a large set of traditional and alternative economic indicators to nowcast investment and aggregate consumption growth. We compare the nowcast performance of mixed frequency models with the ONS first estimates for both macroeconomic variables. When predicting the latest estimate, the nowcasting models cannot improve over the ONS’ first estimate. Nonetheless, some classes of predictors can assist in improving early estimates under some circumstances. In particular, monthly sectoral growth data and real-time data on vacancies would offer potential timely insights into both consumption and investment movements during volatile periods such as 2020-2021.