UK Q4 GDP up 0.4 pct on previous 3 months, 2004 growth only 3 pct - NIESR
Thursday, January 13, 2005 1:45:18 PM
afxpress.com
LONDON (AFX) - The UK economy continues to grow at below its so-called trend rate following another disappointing set of manufacturing data, a leading think-tank said today. The National Institute of Economic and Social Research is predicting that UK GDP in the three months to end-December increased by only 0.4 pct from the previous three months, below the estimated trend rate of growth of a quarterly 0.6 pct
For the full year 2004, NIESR is predicting growth of only 3.0 pct, at the bottom end of both market and government expectations
Today's data come in the wake of further weak manufacturing data, which showed the beleaguered manufacturing sector sliding towards recession once again as the expected rebound in output failed to materialise in November
The office of National Statistics revealed that manufacturing output unexpectedly fell 0.1 pct in November from the previous month, the same as in October. The consensus of analysts' forecasts was for a 0.3 pct improvement
That means manufacturing output, which accounts for just over 17 pct of the UK's overall GDP, has fallen for five of the last five months, suggesting the sector is likely to prove a drag on the economy in the fourth quarter
However, NIESR does not see a case for an interest rate cut yet. Earlier, the Bank of England kept its key repo rate unchanged at 4.75 pct
"Since the third quarter a number of factors have acted to improve prospects for the current year," NIESR said, noting the reduction in medium and long-term interest rates, including those of fixed-rate mortgages, lower oil prices and an increase in share prices. "We therefore continue to expect growth in the current year to be at or slightly above trend rates," NIESR said
[must be another one of them soft landing calls. Everyone else is making them. may as well go with the crowd. mish] |
