The Conference Board Leading Economic Index® (LEI) for the U.K. increased 0.4 percent in January, after increasing 0.6 percent in December and remaining unchanged in November. Five of the seven components made positive contributions to the index in December. The index now stands at 103.0 (2004=100).

The Conference Board LEI for the UK increased in January, following a sharp increase in December 2010. Index levels were revised slightly lower from August to December 2010 as fourth quarter data for total gross operating surplus became available. Between July 2010 and January 2011, the leading economic index increased 2.0 percent (about a 4.0 percent annual rate), below the growth of 3.2 percent (about a 6.4 percent annual rate) during the previous six months. However, the strengths among the leading indicators have remained more widespread than the weaknesses in recent months.

The Conference Board CEI for the UK, a measure of current economic activity, increased in January following no change in December. During the six-month period ending January 2011, the coincident economic index grew by 0.4 percent (about a 0.8 percent annual rate), slower than the growth of 1.0 percent (about a 2.0 percent annual rate) between January and July 2010. However, the strengths among the coincident indicators have been widespread in recent months. Meanwhile, real GDP declined at a 2.4 percent annual rate in the fourth quarter of 2010, following gains of 2.9 percent annual rate in the third quarter and 4.1 percent annual rate in the second quarter.

The Conference Board LEI for the UK has been on a rising trend since the second quarter of 2009, but its growth has been moderating in recent months. This index is still 1.3 percent below its most recent peak in June 2007. Meanwhile, The Conference Board CEI for the UK increased in January, after remaining essentially flat in the second half of 2010. Taken together, the recent behavior of the composite indexes suggests that economic activity will likely expand at a 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 January. The positive contributors – from the largest positive contributor to the smallest – were the yield spread, order book volume, stock prices, productivity for the whole economy, and total gross operating surplus of corporations. The negative contributors – from the larger negative contributor– were consumer confidence and volume of expected output.

With the 0.4 percent increase in January, The Conference Board LEI for the U.K. now stands at 103.0 (2004=100). Based on revised data, this index increased 0.6 percent in December and remained unchanged in November. During the six-month span through January, the leading economic index increased 2.0 percent, with five of the seven components advancing (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS

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

With the increase of 0.2 percent in January, The Conference Board CEI for the U.K. now stands at 102.9 (2004=100). Based on revised data, this index remained unchanged in December and increased 0.2 percent in November. During the six-month period through January, the coincident economic index increased 0.4 percent, with three of the four components advancing (diffusion index, six-month span equals 87.5 percent).