Summary
* The UK economy grew by just 0.3% in the second quarter of 2003, this means that in the first half of 2003 the economy expanded by a total of only 0.4%.
* Growth in retail sales volumes remained strong compared to earlier months in the year. Over the past 3 months sales are up 1.8% or 7.2% on an annualised basis.
* Overall industrial production grew by 0.3% in July, this is the fourth consecutive monthly rise. Despite this expansion industrial production has contracted by 0.5% over the year.
* Labour market data this month show that the employment rate is increasing and the unemployment rate is levelling off.
* In August RPIX inflation was unchanged at 2.9%, RPI inflation fell from 3.1% in July to 2.9% and HICP inflation rose from 1.3% to 1.4%.
* The MPC voted unanimously in favour of keeping rates at 3.5%. The minutes of the meeting show the committee feel less confident that consumption will slow of its own accord. In addition, the MPC seem increasingly concerned about the build up of household debt.
* According to the Nationwide house prices rose by 1% during September, bringing the annual increase to 15.5%. This continues the easing of growth seen in recent months. The regional picture continues to show variations. Some of the strongest growth was seen in the North, with areas in the South and especially London experiencing much weaker price increases.
* The most recent data from Halifax puts annual house price growth at 19.1% in August. But they forecast an easing of growth into 2004.
* At £23.7bn, gross lending was down slightly in August. However, this compares with a very strong month in July. Total lending so far in 2003 is 22% higher than the same period in 2002.
* With approvals consistently strong over the last few months we expect lending to stay strong for the rest of the year. We are now estimating that lending will end the year at over £240bn.
* Buy-to-let lending continued to grow strongly in the first half of this year and it accounted for 6.4% of gross lending during this period. This means that there are now 334,800 mortgages outstanding in the sector equal to 4.3% of the mortgage market overall.
