- Chris Williamson, chief economist at Markit
Britain should prepare for a weak first quarter's growth, as data from all key sectors disappointed in March, even though activity indices remained strongly above 50 threshold.
Earlier this week reports showed disappointing growth in the manufacturing and construction sector, however, keeping in mind they represent for about 22% of the economy, the reaction was muted. On the contrary, services sector is a key driver of the U.K. economy and markets were making their bets the figure will at least remain unchanged. A survey from Markit showed that a gauge of activity in the sector that represents 78% of the total output, eased to 57.6 in March following 58.2 a month earlier and missing analysts' expectations. Activity in the sector has moderated since October 2013 when the index peaked at the highest level since May 2007.
Mark Carney refused to increase interest rates even despite broadening economic strengthening. Chris Williamson, however, warned that the nation's policymakers should be worried already, as strong domestic currency can cool growth further. Nonetheless, there are no reasons to consider the slowdown will be anything other than modest, as the U.K. is poised to see the strongest growth among its peers in 2014.
© Dukascopy Bank SA