UK Highlights of Market News’ Economic Forecasts Surveys

London, Feb 7 (MNI) – The following are highlights of forecasts
for upcoming U.K. economic indicators and events.

All times in GMT/ET format.

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Thursday, Feb 9

0930/0430 UK Dec Trade Balance

Prior Median

0930/0430 UK Dec Visible Goods Balance (Stg bln) -8.6 -8.5
0930/0430 UK Dec Non-EU Goods Balance (Stg bln) -5.0 -4.9
0930/0430 UK Dec Total Trade Deficit (Stg bln) -2.6 -2.5

Analysts’ median forecasts are for a marginal narrowing in the
monthly trade balances in December and these data will surely confirm
that trade will make a positive contribution to Q4 GDP.

The total trade deficit in Q3, in balance of payments, value terms,
was Stg9.889 billion and to match that the December total trade gap
would have to explode to Stg5.462 billion. The median forecast is for
a Stg2.5 billion outturn which would entail a narrowing of the total
trade deficit of just under Stg3 billion between Q3 and Q4.

While the read across to the net trade impact on Q4 growth is far
from straightforward, it does look as if net trade will make a welcome
contribution to Q4 growth, having knocked 0.7 percentage point off
growth in the last two quarters.

0930/0430 UK Dec Industrial Production/Manufacturing

Prior Median

0930/0430 UK Dec Industrial Production (%m/m) -0.6 0.2
0930/0430 UK Dec Industrial Production (%y/y) -3.1 -3.0
0930/0430 UK Dec Manufacturing Output (%m/m) -0.2 0.2
0930/0430 UK Dec Manufacturing Output (%y/y) -0.6 0.3

Surveys showed manufacturing activity subdued in December before
picking up sharply in January, with the Markit/CIPS data recording a
marginal contraction in December while January saw the fastest
expansion since last May.

The Q4 GDP data factored in a 0.9% quarterly contraction in
manufacturing and a 1.2% fall in industrial production. Just to get to
that 1.2% number, however, National Statistics had to factor in a sharp
rise in December industrial production (0.6% according to JP Morgan
economists).

If analysts’ median forecasts are right, industrial production is
set to undershoot the ONS’ Q4 GDP estimate. A 0.2% rise would entail a
1.3% fall in Q4 industrial production and a small downward impact on
Q4 GDP.

National Statistics is assuming a sharp rebound in utilities
output, which was hit by the exceptionally mild weather in October and
November.

1200/0700 UK Feb BOE Monthly Policy Decision

Prior Median

1200/0700 UK Feb BOE Base Rate % 0.5 0.5
1200/0700 UK Feb BOE QE (Stg bln) 275 325

The upcoming February Inflation Report looks set to leave the door
wide open to further quantitative easing. The November Inflation Report
showed CPI heading well below its 2% target. In Q1 2014, which will be
the end of the February IR’s two year forecast horizon, it was predicted
to be just over 1.3%.

On the BOE’s own ready reckoners it would need some Stg100 billion
to push CPI back to the 2% target. Monetary Policy Committee members,
however, are split over the inflation outlook and some have downplayed
the case for more QE, with the downside Eurozone risks, in particular,
having diminished.

As a result, analysts have lowered their QE expectations and the
majority now expect the MPC to sanction Stg50 billion.

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Friday, Feb 10

0930/0430 UK Q4 Construction Output

Prior

0930/0430 UK Q4 Construction Output (%q/q) 0.2
0930/0430 UK Q4 Construction Output (%y/y) -1.0
0930/0430 UK Dec Construction Output (%m/m) 0.2
0930/0430 UK Dec Construction Output (%y/y) -1.6

The focus here is on how the Q4 construction output data mesh with
the estimate included in Q4 GDP.

National Statistics assumed construction output fell 0.5% on the
quarter in its preliminary GDP release, but mild December weather should
have provided support to activity.

0930/0430 UK January Producer Price Index (PPI)

Prior Median

0930/0430 UK Jan Output Prices (%m/m) -0.2 0.1
0930/0430 UK Jan Output Prices (%y/y) 4.8 3.7
0930/0430 UK Jan Core Output Prices (%m/m) -0.1 0.0
0930/0430 UK Jan Core Output Prices (%y/y) 3.0 2.3
0930/0430 UK Jan Input Prices (%m/m) -0.6 0.4
0930/0430 UK Jan Input Prices (%y/y) 8.7 6.5

Input price have fallen sharply from their peak, but January saw
pipeline inflation pressures picking up again.

Crude oil prices have spiked, along with metal prices. At the top
end of the forecast range Nomura economists are predicting a 1.1%
monthly rise in input prices, but the median is for a more modest 0.4%
increase.

The input price increases won’t have had time to feed through to
output prices, with core output prices seen flat.

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For further information contact David Robinson on 4420 7862 7491;
e-mail: drobinson@marketnews.com.

[TOPICS: MABDS$,MTABLE]