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UK Growth revised lower in 2011

The UK Suffered a surprise revision to economic growth in the last quarter of 2011, with GDP now estimated to have contracted 0.3% against a previous reading decline of 0.2%. This took the annual rate of growth to 0.5%, with the Office for National Statistics highlighting the key driver as a weak services sector.

Data was mixed in the US, with durable goods orders (i.e. those products designed for longer term use) rebounding 2.2% in February from the previous month. Despite being much improved on last month’s 3.6% decline, the figure came in lower than anticipated. Core durable goods orders, i.e. those excluding volatile transportation items, were however ahead of forecast with a 1.6% month on month gain.

Oil posted a dramatic decline today following reports from the US Energy Information Administration that oil inventories gained 7.1 million barrels last week. The figure measures the weekly change in the number of barrels of crude oil held by US firms, with today’s number representing the biggest gain in nearly 2 years. Crude oil fell on the news, with the US benchmark WTI falling as much as 2.3% in the news. Adding to downward pressure comments from the French Industry Minister said that the US has proposed releasing oil form strategic reserves. The European benchmark Brent Crude lost around 1% to $123.8 per barrel.

Prices of European stocks, having opened in the red, deteriorated further throughout the day and lurched lower an hour before the close of trade, timing with the US Crude Oil Inventory data. The FTSE 100 ended the day lower by around 60 points, the 1% loss seeing it close at 5809.

This was posted in Bdaily's Members' News section by James .