United Kingdom
Provisional figures indicate that the economy of the United
Kingdom grew by 0.8%(q/q) in the third quarter of 2013,
following an increase of 0.7%(q/q) in the second quarter.
On a year on year (y/y) basis, the economy expanded by 1.5%
during Q3 2013 from 1.3% in Q2 2013. Growth was led by
expansions in services (0.7%), manufacturing (0.9%) and
construction (2.5%).
The unemployment rate stood at 7.6% in September while
inflation trended lower to 2.2% in October. The Bank of
England had previously indicated that it would maintain its
benchmark interest rate at 0.5% unless unemployment falls
to 7.0% and if monetary and fiscal situations permit. As such,
there is a possibility that the benchmark rate might be raised
as early as 2015.The Bank of England has maintained its asset
purchase target at GBP375 billion.
On 19 April 2013, Fitch Ratings lowered the United
Kingdom’s long term foreign currency and local currency
credit ratings from AAA to AA+. The outlook for both ratings
is ‘Stable’. The downgrade reflected the weaker economic and
fiscal outlook with the agency forecasting general government
gross debt peaking at 101% of GDP in 2015-16 and economic
growth in 2013 and 2014 of 0.8% and 1.8% respectively. In
April 2013, Standard & Poor’s confirmed its AAA rating with
a ‘Negative’ credit rating outlook. Moody’s Investor Services
maintains an Aa1 rating with a ‘Stable’ outlook.
14
Caribbean Investment iQ December 2013