LONDON, Sept 22 - A gauge of the British economy designed to predict future performance increased for the sixth straight month in August to its highest level since March 2002, suggesting a strong cyclical upturn at the end of the year. NTC Research said on Monday its leading indicator rose to 102.1 last month from 101.1 in July and has remained above its long-term average for three months running. It said the main reasons for the rise were higher bond yields, a pick up in car production and a stronger stock market.
The report comes after several weeks of strong data on the UK economy which have led financial markets to believe that the Bank of England will begin to raise interest rates in the coming months after three years of cuts. The NTC leading indicator is designed to give an approximate guide of turning points in the business cycle about nine months ahead. NTC also released its coincident indicator, showing what is happening now rather than in the future. That picked up to 101.2 in July from 100.9 in June, suggesting the upturn began during the second and third quarters of the year, slightly earlier than the leading indicator had predicted.//