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Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (451)	9/30/2003 7:41:30 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Economic growth estimates double by our business staff timesonline.co.uk [going to have wait and see if this is a more accurate measure... don't know for the moment..pb] The economy grew twice as fast in the first two quarters of the year than had been thought as manufacturing and construction output beat previous estimates. The Office for National Statistics stunned economists by revising up to 0.2 per cent GDP growth in the first three months of the year and to 0.6 per cent, from 0.3 per cent, second quarter expansion. The revision comes amid the introduction of a new way of measuring economic data, so-called "chain linking", designed to give more accurate sector weightings to the overall figures. However, the ONS said the revisions, which also saw last year's economic growth revised down to 1.7 per cent from 1.9 per cent, were caused largely by figures thrown up by an investigation into VAT fraud. "The introduction of chain linking is estimated to have little effect on the growth of GDP," the ONS said. The office also blamed the Department for Trade and Industry for the scale of the upgrade to data for the April to June quarter. "The large upward revision is sue to higher estimates for construction output reflecting data received from the DTI," the ONS said. "Construction output is now estimated to have grown by 4.4 per cent as opposed to the 0.8 per cent previously published." Some observers viewed the level of the revisions as an embarrassment to both ONS and DTI, placing growth at the start of the year nearer trend. Concerns over lingering economic weakness prompted the Bank of England in July to cut interest rates to 3.5 per cent. However, the figures will be welcomed by Chancellor Gordon Brown, who has come under mounting pressure to revise down his estimate for GDP growth this year amid fears that gaps in his sums will necessitate tax rises. The economy now needs growth of 0.7 per cent in the quarter ending today and the next quarter to record 2.0 per cent expansion, the Chancellor's lower estimate, for the year. On the markets, interest rate futures fell sharply on expectations of an imminent rate rise. Shares remained steady in positive territory. The ONS report also revealed that manufacturing output rose 0.5 per cent in the second quarter amid a revival at machinery and equipment factories. Agriculture and fisheries, also helped by the weaker pound, saw output rise 0.6 per cent. Consumer spending rose 0.7 per cent, boosted by "strong growth in expenditure on clothing and footwear, household goods and services and insurance and financial services". Business investment rose 2.0 per cent, albeit still standing below the level in the second quarter of last year. A revision in the export deficit to £10.8 billion, from £11.1bn, increased growth by 0.1 per cent.