Situation
The Index of Industrial Production ( IIP) dropped down to a 0.41% growth per annum in January 2007 ( as compared tothe same period last year) , as compared to a 0.51% growth in December 2006.
The growth rate in January 2007 is the lowest since July 2006.
Note : The raising of the Bank rate may have had to do something with this drop in IIP. The Bank rate was at 4.50 % - 4.75 % from September 2004 to July 2006. Post July 2006 the Bank of England - in order to contain inflation re-initiated rate increases (to achieve its inflation target) . The Bank rate now stands at 5.25% .
Conclusion
(click/double click on chart for the larger picture and analysis)
IIP p.a growth is likely to remain with a range of 1.4% p.a - 0 % p.a ( or a drop toward a 0 % p.a growth) towards mid 2007. The New Orders Index ( NSA) seems to sugget further drops in growth rates for the immediate months.
Post mid 2007 -towards mid 2008 further drops in growth from 0.5% p.a towards a negative (-2.00%) can be expected. ( Bank Rate effects)