British economic growth remained sluggish in March, according to National Institute of Economic and Social Research (NIESR). The latest estimates from the Institute show that UK GDP rose 0.3pc in the three months to March from the three months to February. "These figures confirm a general impression of economic weakness," the NIESR said in a statement. "There is little reason to believe that the weakness is predominantly associated with the war in Iraq; instead it reflects weak demand in UK export markets and some recovery in saving by UK households."
NIESR said the data creates a strong case for a further interest rate reduction by the Bank of England's monetary policy committee, which meets again this week. Policymakers are not expected to lower rates, but the NIESR said the bank should cut 25 basis points off borrowing costs to 3.50pc. "We believe that this change should be made at the next MPC meeting," it said today. //www.fxcentre.com