MNI DATA ANALYSIS: UK Oct GDP Dampened by Fall in Car Output>

-UK Oct GDP +0.1% m/m, +0.4% 3m/3m vs +0.6% q/q in Q3

-UK Oct Manufacturing -0.9% m/m, unchanged 3m/3m

-UK Oct Services +0.2% m/m; +0.3% 3m/3m vs +0.3% Q3

By Laurie Laird, Jamie Satchi and Jai Lakhani

     London (MNI) - The UK economy expanded only modestly in the month 

of October, dampened by a plunged in car production, suggesting the 

economy hit a bump in the final quarter of the year after a sizzling 

third quarter. 

     GDP expanded by 0.1% at the start of the fourth quarter, matching 

the MNI median forecast, after recording no growth in September. 

     That took growth in the three months to October to 0.4%, in line 

with the MNI median, down from a 0.6% gain in the third quarter.  

However, the economy had already appeared to slow toward the end of the 

summer, with much of third quarter growth concentrated in an 

unusually-balmy month of July. 

     Members of the Bank of England's Monetary Policy Committee expects 

growth to moderate to a 0.3% pace in the fourth quarter, according to 

minutes of the MPC meeting on October 31. 

     Over the year to October, the economy expanded by 1.5%, matching 

the year-on-year growth rate recorded in the month of September. 

     Manufacturing exerted the most significant downward pressure on 

growth, declining by 0.9% in October, as motor vehicle production 

slumped by 6.6%. 

     Faltering domestic demand led to numerous car factory shutdowns, 

according to a National Statistics official, noting that automobile 

exports have also tapered off. Manufacturing shaved 0.09 percentage 

points from monthly GDP growth. 

     Pharmaceutical output was also weak in October, declining by 5.0% 

over September, although the official cautioned that drug production 

tends to be volatile on a month-to-month basis. 

     Over the three months to October, manufacturing output was 

unchanged from the previous three months, down from a 0.6% gain in the 

three months to September. 

     Total industrial production fell by a more moderate 0.6% in 

October, boosted by a 1.8% monthly gain in mining and quarrying. Over 

three months to October, industrial production increased by 0.3%, down 

from a 0.8% jump in the second quarter. 

     The dominant service sector accelerated by more than expected in 

October, expanding by 0.2% in October, above the MNI median forecast of 

a 0.1% gain. Services, which account for 79.6% of total output, 

contributed 0.17 percentage points to monthly GDP growth. 

     Over the three months to October, services expanded by 0.3% in the 

three months to October, matching the MNI median forecast, down from the 

0.4% gain reported in the third quarter.  The sector accounted for 0.23 

percentage points of total growth in the three months to October. 

     Meanwhile, construction output declined by 0.2% in October, rising 

by 1.2% in the three months to October, down from a 2.1% pace in the 

third quarter. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]