UK Growth Indicators Suggest Slowdown
May 7, 2008
Industrial and manufacturing production for the month of March fell by more than analyst’s expectations in the UK. Industrial production decreased 0.5% m/m vs. expectations for a 0.1% decrease, and manufacturing production declined 0.5% from the prior month. Reports indicate that 10 of 12 manufacturing sub sectors fell, with the biggest decline resulting from transport equipment. The data reaffirms the potential need for further rate cuts from the BoE, however, with longer term trends still showing positive growth it seems unlikely that a rate cut will be delivered at the May MPC meeting. Following the poor data the Pound slipped 0.7% against the U.S. dollar, to levels not seen since mid February.