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There were few data releases in the UK during the past week to disturb the endless budget speculation. ...
There were few data releases in the UK during the past week to disturb the endless budget speculation.

The main news item was the release of revised estimates for real GDP growth in the third quarter of the year. These showed a rise of 0.4% in the aggregate measure, and just 0.3% in GDP excluding activities in the North Sea. This is the slowest rate of increase for onshore GDP since the last quarter of 1992, and has increased speculation that the Chancellor will be looking to cut interest rates soon after the budget (the next meeting between the Chancellor and the Governor of the Bank of England is due to be held on December 13th).

One development that does not support the case for lower interest rates is renewed weakness of sterling on the foreign exchanges. In the last week it reached new lows against the Deutschemark, and on a trade-weighted index basis. Sterling was not helped by this week's trade figures, which showed the biggest deficit since 1988 and were far worse than expected.

It was a quiet week for data releases overseas too. Most noteworthy, perhaps, was the 1.8% fall in October's industrial production in France, confounding expectations of a small rise.

In Japan the leading indicators series and private sector machine orders (a good lead indicator of investment spending) were both weaker than anticipated.
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