Destocking seen as the main danger
Thursday 03 August 1995
The US has recently undergone an inventory correction that left growth in gross domestic product virtually flat in the second quarter of the year.
Stocks had been built up in the UK throughout 1994 and the first quarter of 1995.
They rose by pounds 800m in the first quarter of 1995 following a rise of pounds 1.4bn in the final quarter of 1994.
Stocks were less important to firms than in the 1970s and 1980s: the ratio of stocks to output had fallen since about 1980.
However, by the first quarter of 1995, stockbuilding "had on average made about the same contribution to GDP growth as it did in the previous two recoveries". But some of the more recent rise in manufacturers' finished goods and retail stocks "was probably involuntary as domestic demand turned out weaker than expected".
In July the survey by the Confederation of british Industry had pointed to involuntary stockbuilding: manu facturers had built up stocks more than expected in the previous four months and they also expected to cut stocks in the following four.
It was therefore possible that a similar temporary inventory correction to the one that had occurred in the US might also affect the UK.
There was also "a risk that temporary destocking might provoke a more general and prolonged slowdown in the second half of this year".
- 1 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 2 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 3 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
Isis burns thousands of books and rare manuscripts from Mosul's libraries
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Family of man named as 'Jihadi John' described by neighbours as 'normal Muslim family'
Mohammed Emwazi: Nine things we know about man named as Isis militant 'Jihadi John'
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...