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The economy
Page 33
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The global economy, with the US in the lead, will continue to shudder from the effects of the credit crunch. This will keep money expensive and slightly harder to come by. The UK economy is also showing signs of slowing.
Our trade deficit shrank to 24.1bn in October 2007, the latest figures show; this was helped by a 2.3bn surplus in services. Even with a slowing economy, imports will continue to flood into
the UK -41 October exports, excluding oil and some consumer goods, grew by 0.5%. The cost of manufacturing rose by 4.5%, largely due to the higher price of fuel and home-grown food. This could put more pressure on transport costs.
GDP growth was down slightly at 0.7%. While construction performed well (0.8% up and 3.4% higher than in the third quarter of 2006), production output was flat with manufacturing, mining and quarrying all weak in the third quarter of 2007. The services sector continued to grow (by 0.9%) but there was a slight contraction in the growth of the business and financial services which dominate this sector.
The fact that UK GDP growth is buoyed up by the services sector is one of the key issues which now separates GDP growth from demand for transport.