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To: maceng2 who wrote (153858)	2/28/2002 9:16:08 AM
From: maceng2	Respond to of 436258

Economy stalls as US slowdown hits industry By David Turner Published: February 27 2002 10:30 \| Last Updated: February 27 2002 22:05 The UK economy stopped growing at the end of last year, for the first time in almost a decade. Revised national accounts figures published on Wednesday by the Office for National Statistics underline that despite strong domestic demand, the UK has not remained immune from the global slowdown. Gross domestic product in the fourth quarter was unchanged on the third quarter. It was 1.7 per cent higher than a year before - the worst annual rate since the second quarter of 1999. The revised figures caught analysts by surprise, given the ONS's initial estimate that economic growth had slowed sharply, to 0.2 per cent from 0.5 per cent, but not halted altogether in the fourth quarter. A lower estimate for growth in the service sector was largely responsible for the downward revision. Nevertheless, the UK's service industries - which are less exposed to international conditions than manufacturing - still grew by a robust 0.7 per cent. Household spending was also high in the fourth quarter. But the internationally exposed manufacturing sector dived again, with a quarterly fall of 1.7 per cent. John Butler, economist at HSBC, said: "The two-speed economy lives on." Investment fell by 1.7 per cent. Analysts said this reflected a reining in of spending in response to lower company profitability. The widening trade deficit continued also to exercise a drain on the growth figures. The new estimate now means that in the fourth quarter the UK performed worse than the US - the source of the global slowdown. But economists warned against drawing excessively pessimistic conclusions. UK economic growth last year is still estimated to have been the fastest of any of the Group of Seven leading powers. Many analysts expect the same in 2002, as the UK economy recovers sharply from what is widely seen as the low point in its fortunes at the end of last year. Last week's manufacturing survey from the Confederation of British Industry showed a tinge of optimism regarding future levels of business for the first time since the summer - suggesting that the tentative upturn in the global economy could be coming to the rescue of the UK's hardest hit sector. The last time the UK economy failed to grow was in the second quarter of 1992, at the end of the last economy-wide recession. markets.ft.com Article on Germany too.. markets.ft.com