Saturday, 26 October 2013

UK economy accelerates but other economic data mixed

The UK economy grew 0.8 percent in the third quarter, the Office for National Statistics reported on Friday. This was up from 0.7 percent growth in the second quarter and was the fastest growth rate in more than three years.

Other economic data on Friday were not as positive.

In the US, durable goods orders rose 3.7 percent in September. However, this was due to a surge in aircraft orders. Excluding transportation equipment, orders fell 0.1 percent. Orders for non-defence capital goods excluding aircraft fell 1.1 percent.

Also pointing to weakness in the US economy was the final reading of the Thomson Reuters/University of Michigan consumer sentiment index for October. The index fell to 73.2 this month from 77.5 in September.

Also falling in October was German business sentiment. The Ifo business climate index fell to 107.4 this month from 107.7 in September. It was the index's first decline in six months.

Friday did bring more evidence though that Japan may be pulling out of deflation. Consumer prices excluding fresh food and energy were unchanged in September from a year earlier, the first time since December 2008 that this measure of prices has not fallen.

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