STOCK MARKET WATCH -- Thursday, 27 December 2012

[Demeter]

16. U.K. Recovery Weaker Than Estimated as Deficit Widens

http://www.bloomberg.com/news/2012-12-21/u-k-recovery-weaker-than-estimated-as-gdp-revised-to-0-9-1-.html

Britain’s economy expanded less than previously estimated in the third quarter and the budget deficit unexpectedly widened in November, complicating Prime Minister David Cameron’s attempts to bolster the recovery.

Gross domestic product rose 0.9 percent from the second quarter, down from a previous estimate of 1 percent, the Office for National Statistics said today in London. The deficit excluding government support for banks was 17.5 billion pounds ($28 billion), which compared with 16.3 billion pounds a year earlier and the median forecast of 16 billion pounds in a Bloomberg News survey of 19 economists.

The Office for Budget Responsibility cut its growth forecasts this month and said Chancellor of the Exchequer George Osborne will miss his target of cutting the burden of government debt by 2015, prompting warnings that Britain could lose its top credit rating. The third-quarter growth surge may prove short lived, with the Bank of England warning the economy may shrink this quarter and forecasting stagnant output in the near term.

“We’re expecting a fairly sluggish fourth quarter and the public deficit doesn’t seem to be coming down as rapidly,” said Peter Dixon, an economist at Commerzbank AG in London. “The future will be one of modest fiscal retrenchment.”

The growth in the three months through September was the first for the U.K. since the third quarter of 2011. From a year earlier, GDP was unchanged, the statistics office said...