The UK economy grew by 0.4pc in the three months to December compared with the previous three months, according to estimates released today by the National Institute of Economic and Social Research (NIESR). The think-tank, which publishes its GDP estimates on the back of official monthly industrial production data, said the overall picture was one of slightly below trend growth. "The interest rate decision must now be finely balanced; any further slowdown would strengthen the case for an interest rate reduction even if inflation remains slightly above target," NIESR said.
Last week, policymakers at the Bank of England left interest rates unchanged at 4.0pc for the fourteenth straight month. The bank was not expected to lower rates due to fears of over inflating the UK housing market. But, according to analysts, this may be set to change in the forthcoming months as data emerges of a slowdown in consumer spending GDP growth in the three months to November stood at 1.0pc but the figures were distorted by a weak comparative period which included the holiday shortened month of June.//www.fxcentre.com