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Hopes are rising 4Q GDP growth may be revised higher
Manufacturing output also improved in December, official data shows.
by Deborah Hyde on Feb 10, 2010 at 15:00
Latest manufacturing data suggests the preliminary reading of UK output in the fourth quarter of 2009 was overly pessimistic.
Data released this morning by the Office for National Statistics showed that industrial production rose by 0.5 percentage points in December from November - higher than the consensus.
Manufacturing output contributed much of the strength, rising 0.9% in the quarter.
Owen James, economist at the Centre for Economics and Business Research said: 'This all paints a more positive picture for the health of the United Kingdom economy than that suggested by the official growth rates for the last two quarters.'
He believes the Office of National Statistics will revise its preliminary GDP estimate higher over the coming months.
Jonathan Loynes at Capital Economics agrees, saying today's data suggests the economy actually grew 0.2% not 0.1% in the last three months of 2009
Seperately, the National Institute of Economic and Social Research calculates the UK economy grew by 0.4% in the three months ending in January, higher than the growth of 0.1% in the three months ending in December.
Martin Weale, economist at the Institute said the improvement in the growth rate to January is more the consequence of the fact that output in October was very weak rather than a clear indication that a more substantial recovery is underway.
'Output levels are similar to those in the early summer of last year and, although we hope the recession is over, the economy remains very depressed,' he said.