UK GDP Growth Picks Up In 3 Months Through August: NIESR

By David Robinson

     LONDON (MNI) - The National Institute of Economic and Social Research

estimated that UK GDP grew by 0.4% in the three months through August on the

previous three months and it predicted that third quarter growth would also run

at this pace.

     If third quarter growth does come in at 0.4% on the quarter, this would be

a touch quicker than the Bank of England Monetary Policy Committee forecast.

     The August MPC minutes noted that growth had been estimated at 0.3% for the

second quarter and on balance the MPC thought "that GDP growth was likely to

remain at its recent pace into the third quarter."

     Amit Kara, head of UK economic research at NIESR, said that if economic

growth was sustained at 0.4% to 0.5% a quarter "we prescribe a 25 basis point

increase in Bank Rate in the first quarter of 2018."

     Recent activity data has shown a sharp divergence between the struggling

construction sector and the buoyant manufacturing sector, although trade data

remains disappointing given the weakness in sterling.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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