OECD indicator points to firmer UK economy in middle of 2013

Ben Southwood
Follow Ben
SIGNS from the UK economy suggest that it will recover mildly over 2013, according to the Organisation for Economic Co-operation and Development (OECD).

The OECD’s latest composite leading indicator (CLI), predicting economic conditions six months from last December again increased, but this time by only 0.09 points.

This follows on the heels of stronger injections for each of the past five months, and pushed the UK further above its long-term average of 100 – to 100.7, with the OECD again describing the situation as one of firming growth.

However, the organisation did say that indicator signs were “slightly weaker compared to last month’s comparison.”

But while British GDP growth may pale in comparison to the rapid rates enjoyed in emerging economies, its CLI trounced Brazil’s, China’s, India’s and Russia’s – which range from 97.7 to 99.6. Three out of four of have fallen more than one per cent over the past year.

By contrast the UK’s CLI has grown 1.55 per cent over the year, beating out not just emerging economies but also all of the world’s seven major mature economies, as well as the OECD average, 0.25.

Howard Archer at IHS Global Insight said the evidence pointed to a fragile recovery from the 0.3 per cent hit to GDP suffered in the fourth quarter. “A UK upturn is just about intact, but it is struggling to gain traction,” Archer said.