The US economy expanded in fourth quarter by just a third of its pace in the previous three months. US GDP rose 1.4pc on an annualised basis in the three months to December 2002, down from 4.0pc in the previous three months, the Commerce Department said today. The figure was unchanged from the preliminary reading published last month. The 1.4pc growth rate is the weakest period of growth since the second quarter of 2002, when the economy expanded at a 1.3pc rate. Today's data is unlikely to change the market's view of the economy, particularly as the market is almost entirely focused on the war in Iraq.
Earlier today, the IMF said the potential for a rebound in the global economy is "overshadowed by the intensified uncertainty about the prospect of war in Iraq and its repercussions on growth and stability". Economic analysis is now "redundant," according to Niall Dunne, economist at Ulster Bank, because the market is trading on a reactionary basis to developments. But he warned that when the military conflict ends and the US is faced with the tab for the war, the pressure this will put on the deficit will hinder the economy, Wall St and the dollar. //www.fxcentre.com