LONDON (AFX) - UK economic data this week are unlikely to provide fresh direction for interest rates, according to economists. David Page, economist at Investec, believes the pick of the week will be the final third-quarter UK GDP data on Thursday. "If anything, it is this piece of news which will weigh at the margins," he said.
Page expects UK Q3 GDP growth to be revised downwards to 0.4 pct on the quarter and 2.0 pct on the year. But he was in the minority. The vast majority of economists surveyed believe National Statistic's previous estimate of 0.5 and 2.1 pct growths will be maintained. Also to be released this week are the public sector cash requirement figures.
Public finances are still on track to generate a surplus above the government's budget forecast of 5 bln stg and certainly above the new estimate of a 2.5 bln deficit in the Nov 27 pre-budget report, Geoffrey Dicks economist at the Royal Bank of Scotland said. "November typically produces a small deficit and we forecast a shortfall of 3.5 bln stg," he added.
Overall growth revenues have moderated but a slump in receipts is unlikely, Dicks said.
While October's non-EU trade in goods balance came in better than expected, a repeat of this scenario is not expected in November given the sluggishness of the global economy, economists said. "We expect the EU shortfall to rise again this time, in part because of a further weakening in euro zone demand, but also because a collapsing oil price will have reduced the UK's surplus with its EU partners," Philip Shaw, economist at Investec said.
The week will also witness the release of the Monetary Policy Committee's December meeting's minutes where rates were left unchanged at 4 pct as was widely expected.
While a near unanimous vote is expected, the main point of interest will be whether some members felt that rates could be cut again at some point, Shaw said.
"We continue to feel that a further cut in official rates is more likely than not during the early months of next year as jitters over the global economy remain. Nonetheless we are probably close to a turning point in the monetary policy cycle and uncertainty over prospects extend in both directions," he said.

AFX CONSENSUS PREVIOUS

WEDNESDAY, DEC 19

UK trade data (bln stg)
Oct Global (mth-on-mth) -2.2 -2.247

Nov Non-EU (mth-on-mth) -2.0 -1.717

Bank of England
Dec MPC meeting minutes

THURSDAY, DEC 20
UK Nov PSNCR (bln stg) 3.2 -5.908

UK Nov provisional M4
mth-on-mth 0.7 0.6
yr-on-yr 8.5 8.1

UK Nov prov M4 lending (bln stg)
(mth-on mth) 7.5 10.6

UK final Q3 GDP
(qtr-on-qtr) 0.5 0.5
(yr-on-yr) 2.1 2.1

UK Q3 balance of payments -4.2 -3.895
(bln stg)