Tuesday, October 09, 2012
Bouncing through the disappointment
Posted by David Smith at 06:00 PM
Category: Thoughts and responses

Today's industrial production figures, for August, looked disappointing, with falls of 0.5% for overall output and 1.2% for manufacturing but they followed big jumps, of 2.8% and 3.1% respectively, in July. Industrial production in July-August was 1.4% up on the second quarter average, while manufacturing was up 1% on the same basis, suggesting a significant contribution to growth from both in the third quarter. More details here.

The National Institute of Economic and Social research, here, suggests GDP rose by 0.8% in the third quarter, though some of that reflects a bounceback from the Jubilee-affected second quarter. It rightly points out that underlying growth in both quarters was probably 0.2% to 0.3%.

There was bad news on trade today, with the deficit widening to 4.2 billion in August, from 1.7 billion in July. The size of the trade deficit is worrying, particularly given the advantages of a competitive pound. Behind the statistical noise there is an underlying deterioration. More here.