The latest revised data from the Office for National Statistics shows UK economic growth moving upward, with gross domestic product rising 3.1% year-on-year during the first quarter of 2000, and up 0.5% compared to the last quarter of 1999. Earlier projections had forecast an annual growth rate of 2.9% and 0.4% on the quarter.

But, says the report, the service and manufacturing sectors of the economy are moving in opposite directions. Whilst the former, especially business services and finance, reports healthy gains - 0.8% on the quarter and 3.2% compared with the same period a year earlier – the latter is wilting. Output within production industries achieved a 1.4% increase year-on-year, but fell by around 0.8% compared with the final quarter of 1999.

The figures reinforce the Government’s forecast that the economy will grow by at least 3% this year. However, the rate of investment is slowing down, with investment for the same period increasing by only 0.2%, the lowest growth since the fourth quarter of 1996.

According to one analyst at Dresdner Kleinwort Benson, the recent weakness of sterling could soon "give a bit of a boost to manufacturing".

News source: BBC Online Business News (UK)