The Conference Board Leading Economic Index® (LEI) for the U.K. increased 0.2 percent in July to 103.4 (2004=100), following gains of 0.5 percent in June and 0.4 percent in May. Five of the seven components made positive contributions to the index in July.

The Conference Board LEI for the U.K. increased again in July. Positive contributions from order book volume and the yield spread more than offset negative contributions from consumer confidence and volume of expected output. Between January and July 2010, the leading economic index increased by 3.5 percent (about a 7.1 percent annual rate), slower than the 5.6 percent increase (about an 11.5 percent annual rate) between July 2009 and January 2010. In addition, the strengths among the leading indicators have become less widespread in recent months, though they are still slightly more widespread than the weaknesses.

The Conference Board CEI for the U.K., a measure of current economic activity, increased for the sixth consecutive month in July. Between January and July 2010, the coincident economic index increased by 1.1 percent (about a 2.2 percent annual rate), a reversal from the decline of 0.6 percent (about a -1.2 percent annual rate) during the previous six months. Additionally, the strengths among the coincident indicators have remained very widespread, with all four components increasing during the past six months. At the same time, real GDP grew at a (revised) 5.0 percent annual rate during the second quarter of 2010, after growing at a 1.2 percent annual rate during the first quarter.

The Conference Board LEI for the U.K. has been rising since April 2009, though its six-month growth rate has continued to moderate and the weaknesses among its components have become more widespread in recent months. Meanwhile, The Conference Board CEI for the U.K. has been increasing since February, after declining through the middle of 2009. Taken together, the recent behavior of the composite indexes suggest that economic activity should continue to expand, but at a more modest pace in the near term.

LEADING INDICATORS

Five of the seven components that make up The Conference Board LEI for the U.K. increased in July. The positive contributors – from the largest positive contributor to the smallest – were order book volume, the yield spread, productivity for the whole economy, total gross operating surplus of corporations, and stock prices. The negative contributors – from the largest negative contributor to the smallest – were consumer confidence and volume of expected output.

With the 0.2 percent increase in July, The Conference Board LEI for the U.K. now stands at 103.4 (2004=100). Based on revised data, this index increased 0.5 percent in June and increased 0.4 percent in May. During the six-month span through July, the leading economic index increased 3.5 percent, with four of the seven components advancing (diffusion index, six-month span equals 57.1 percent).

COINCIDENT INDICATORS

All four components that make up The Conference Board CEI for the U.K. increased in July. The positive contributors – from the largest positive contributor to the smallest – were retail sales, employment, real household disposable income, and industrial production.

With the increase of 0.1 percent in July, The Conference Board CEI for the U.K. now stands at 103.1 (2004=100). Based on revised data, this index increased 0.1 percent in June and increased 0.2 percent in May. During the six-month period through July, the coincident economic index increased 1.1 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).