LONDON (MNI) – UK output returned to growth in the three months
through February but was still running at a below trend rate, the
National Institute of Economic and Social Research said today.
NIESR said output grew by just 0.2% in the three months through
February, having contracted by 0.2% in the three months through January
and by 0.6% in the fourth quarter.
The organisation said that “most of the effects of the adverse
weather in December should have been unwound in the most recent data.
The underlying quarterly growth rate of the economy remains below its
trend and the output gap is likely to be widening.”
Better-than-expected industrial and manufacturing production data
for January out today also suggested that the UK economy may be
expanding again and the NIESR estimates reinforce that development.
Output data in the early months of 2011 is widely seen by analysts
as key for monetary policy.
The minutes of the February Bank of England Monetary Policy
Committee said some members wanted to wait “to see indicators of how the
economy performed at the start of the year to help assess whether or not
the decline in GDP in the fourth quarter presaged sustained economic
weakness.”
The NIESR data, showing sub-trend growth, leave it open to doubt
whether the recovery will be robust enough to deliver the expected
tightening in monetary policy.
NIESR says its track record in producing early estimates of GDP
suggests that its projection for the most recent three-month period has
a standard error of 0.1-0.2% point when compared to the first estimate
produced by the Office for National Statistics.
It has come under criticism, however, for some of its recent growth
estimates, which have been some way out from the official growth data.
–London bureau: +4420 7862 7492; email: dthomas@marketnews.com
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