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British economy stalls
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February 27, 2002: 6:41 a.m. ET
UK economy grinds to halt in 4th quarter as manufacturing, services sectors slow
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LONDON (CNN) - Britain's economy stalled unexpectedly at the end of 2001 due to slower than anticipated growth in the manufacturing and services sectors.
The Office for National Statistics on Wednesday said it revised its fourth quarter growth estimate to zero from a previous forecast of 0.2 percent -- the worst performance since the second quarter of 1992 when the UK was in the middle of a recession.
On an annual basis, gross domestic product grew by 1.7 percent from the fourth quarter of 2000, the lowest yearly gain since the second quarter of 1999.
In January, the ONS estimated GDP growth would be 0.2 percent in the fourth quarter and 1.9 percent year-on-year.
It said the downward revision was partly due to lower figures for manufacturing and services than indicated by the data available last month.
The revised numbers show manufacturing output fell 5.6 percent in the fourth quarter from the same period a year earlier, its biggest drop since the third quarter of 1991. Returns for computing and other business services, as well as hotels and restaurants, declined more than expected in the quarter.
The drop in GDP came as a surprise to many economists, who had expected the fourth quarter numbers to be unchanged from the original estimates.
It also follows German GDP numbers on Wednesday which showed Europe's largest economy slipped into recession in the second half of 2001.
The Federal Statistics Office said Germany's economy shrank 0.3 percent in the last three months of 2001 after contracting 0.2 percent in the third quarter. Year-on-year fourth quarter GDP contracted 0.1 percent, its first annual drop since the first quarter of 1996.
Meanwhile, the French statistics offices INSEE said on Friday that the country's gross domestic product slipped to minus 0.1 percent from the third quarter for which the figure was unchanged at 0.5 percent.
Figures from all three countries are expected to put pressure on the Bank and England and the European Central Bank to cut or leave interest rates unchanged, when their monetary policy committees meet next week.
There has been speculation that the central banks were looking to raise rates -- following a series of cuts last year -- as the global economic slowdown appeared to have bottomed out. 
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