UK data bring back the fear of a “triple dip”

■ UK data bring back the fear of a “triple dip”

January manufacturing output contracted along with industrial production (-1.2% mom). Most of the fall in the industrial production can be attributed to the maintenance issues in the North Sea production platforms; which already contributed to the deterioration in activity in Q4 2012. In addition, the heavy snow in January had a strong negative impact on the manufacturing output. As these factors are temporary and set to be reversed, it is too early to expect a technical recession in Q1 2013.Looking ahead, the sharp fall of sterling since the beginning of the year will play some role in helping the manufacturers.

Regarding the RICS survey, we have observed a further fall in prices in February, from -4% to -6%, well below expectations (median: -1%). But, despite this fall in prices, the number of houses sold has reached an encouraging 30-month high, as a consequence of the BoE's “Funding for Lending Scheme”. Looking at other components, the sales expectations and the new buyer enquiries are showing a very modest rise, levelling off the very weak January report.