US economy notches up 4.8% growth

THE US economy grew at an annual rate of 4.8 per cent in the last three months of 1992, more strongly than first thought, according to US Commerce Department figures released yesterday, writes Robert Chote.

The upward revision came as the London stock market rose sharply on hopes of a cut in German interest rates next week, which might give the UK more scope to cut rates again. The FT-SE index of 100 leading shares rose by 39.3 points to close at 2,868.

The dollar strengthened across the board. The pound fell 0.9 cents to dollars 1.4210, while the dollar rose a pfennig to DM1.6450. The pound dropped half a pfennig against the mark to DM2.3330.

Fourth-quarter US growth was revised from a provisional estimate of 3.8 per cent because exports, stocks and consumer spending were higher than first thought. The revised figure was the strongest for five years.

The economy grew by 3.4 per cent in the third quarter and by 2.1 per cent in 1992 as a whole. Last year saw the strongest calendar-year expansion in the US since 1988.

The revision was slightly larger than Wall Street had expected.