Weak Growth Casts Cloud Over Brown's Forecast Household Spending Slump Means Rates May Have Peaked

Summary

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THE UK economy fell significantly short of its long-term trend growth rate in the first quarter - as household spending clocked up its weakest annual increase for four years - official figures showed yesterday.

The weaker growth in gross domestic product, and particularly its breakdown, raised even further the chances that UK base rates have peaked already at 4.75-per cent and could start falling later this year. However, it heaped further doubt on chancellor Gordon Brown's forecast of 3-per cent to 3.5-per cent growth for 2005.

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Extract

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Weak Growth Casts Cloud Over Brown's Forecast Household Spending Slump Means Rates May Have Peaked

National Statistics yesterday revised first-quarter growth down from 0.6-per cent to 0.5-per cent because a 0.7-per cent fall in manufacturing output was much worse than the 0.1-per cent ris...

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