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LONDON (Dow Jones)--U.K. consumer price inflation fell to its lowest annual rate for thirty months in August, casting further doubt on the need for any more interest rate hikes from the Bank of England this autumn. The Office for National Statistics said Tuesday that annual CPI inflation was 1.8% in August, down from 1.9% in July. The rate was also just below the 1.9% level expected by economists surveyed by Dow Jones Newswires last week. On the month, the consumer price index was up 0.4%, compared with a fall of 0.6% in July. That was in line with expectations. The annual rate of inflation was last lower in February 2005, when it was 1.7%. CPI inflation has now been lower than the BOE's 2.0% target rate for two months in a row. That will further cement expectations that the central bank's Monetary Policy Committee won't see the need to raise interest rates for the rest of 2007, leaving bank rate at 5.75%. The MPC had previously raised rates five times in the twelve months to August. The ONS also said that the retail price index rose 0.6% on the month in August, and 4.1% on the year. The Dow Jones Newswires forecast was for it to go up 0.4% on the month and be at an annual rate of 4.0%. In July the RPI fell 0.6% on the month and rose 3.8% in annual terms. Copyright © 2007 Dow Jones & Company, Inc.

UK Aug CPI +0.4% On Month; +1.8% On Year UK Aug CPI Was Forecast +0.4% On Month; +1.9% On Year UK Aug Core CPI Was +0.4% On Month; +1.8% On Year UK Aug RPI +0.6% On Month; +4.1% On Year

LONDON (Dow Jones)--The euro zone's trade surplus with the rest of the world narrowed in July from June, but export growth remained strong despite the strength of the region's currency. The 13 countries that share the euro recorded a surplus of EUR4.6 billion in trade in goods with the rest of the world in July, the European statistics agency Eurostat said Monday, narrower than the figure reported in June, but well ahead of the EUR1.1 billion surplus recorded a year earlier. Eurostat revised June's surplus down to EUR7.6 billion from an originally reported EUR7.8 billion surplus. The data came in below the EUR5.1 billion surplus predicted by economists in a Dow Jones survey last week, but still suggest that exports continue to perform well. Eurostat said exports grew 15% year-on-year, rising to EUR129.7 billion from EUR113.1 billion, while imports rose 12%, and the euro zone's internal dispatches grew 10%. The recent strength of the euro against the dollar has prompted complaints from some politicians that the exchange rate would harm exports and business prospects for the region. Last week, the euro reached a fresh new high against the dollar. And while Monday's data suggest that the currency isn't affecting export growth, they are unlikely to affect the European Central Bank's outlook on interest rates. The ECB left its key interest rate on hold at its September monthly policy meeting due to uncertainty about the impact of the ongoing liquidity crisis that has been affecting financial markets since the end of July. Many economists had expected the ECB's Governing Council to raise the rate by 25 basis points to 4.25% before the year's end, but many now think this is heavily dependent on whether or not the market turbulence persists. In the first six months of the year, the data showed that the euro zone's trade surplus with the U.K. increased, compared with the first six months of 2006, while its surplus with the U.S. fell. The region's deficit with China continued to widen, while the deficit with Russia narrowed further. The euro zone's energy deficit was EUR105.7 billion in the six months to June, slightly narrower than the EUR125.4 billion deficit recorded in the six months to June 2006. Exports of manufactured goods remained strong, growing 10% on the year. Copyright © 2007 Dow Jones & Company, Inc.

Euro-Zone Jul Trade Balance +EUR4.6B Vs +EUR1.1B Jul 06

LONDON -The U.K.'s goods trade deficit with the rest of the world widened to GBP7.1 billion in July from GBP6.5 billion in June as imports rose more than exports, the Office for National Statistics said Tuesday. The June deficit was revised from a previously published figure of GBP6.3 billion. The deficit in July was much wider than expected. Economists surveyed by Dow Jones Newswires last week forecast the trade deficit would widen to GBP6.4 billion. ONS said that total imports rose to GBP26.3 billion in the month compared with GBP25.3 billion the month before. The rise, it said, was mainly due to higher imports of consumer goods, cars, chemicals, and food, drink and tobacco. Exports also rose, but only by around GBP0.5 billion. That was driven by higher overseas purchases of U.K.-produced capital goods and chemicals, ONS said. ONS's trade data have been bedeviled by inaccuracy and revision in recent times, mainly due to problems recording import and export levels following a European-wide value-added tax scam. There was a further problem Tuesday when ONS admitted that GBP300 million of oil exports had been double-counted in June, because of an incorrect return from an oil trader. As a result, the U.K.'s oil trade balance was slightly in deficit in June, compared with a previously published surplus. In July the oil trade deficit widened further to GBP0.3 billion. Copyright ? 2007 Dow Jones & Company, Inc.

UK Jul Adj Global Trade -GBP7.1B Vs Revised -GBP6.5B UK Jun Adj Goods Trade Balance Revised From -GBP6.3B UK Jul Adj Global Goods Trade Bal Was Forecast -GBP6.4B UK Jul Adj Non-EU Trade -GBP4.5B Vs -GBP3.4B UK Jul Adj Non-EU Trade Balance Was Forecast -GBP3.3B

Romanian Aug CPI +0.86% Vs +0.29% In July- Mediafax

French July Foreign Trade Gap EUR3.3 Bln Vs June EUR3.15 Bln

Definition The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Why Do Investors Care? Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the dollar in the foreign exchange market. Imports indicate demand for foreign goods and services here in the U.S. Exports show the demand for U.S. goods in countries overseas. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of U.S. trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country. Legal Notices |? Copyright 2000 -2007 Econoday, Inc.

U.K. seasonally adjusted input prices fell 0.5% on the month and grew 0.7% on the year in August, below economists' expectations. Output prices rose 0.1% on the month and 2.5% on the year, the Office of National Statistics says. Core output prices, which exclude volatile items, such as food, drink, tobacco, and petrol, rose 0.2% on the month and 2.4% on the year. In a DJN survey, economists predicted that output prices would rise 0.1% on the month and 2.4% on the year. They estimated that input prices would fall 0.2% on the month and rise 0.9% on the year, and that core prices would rise 2.3% on the year. Copyright © 2007 Dow Jones & Company, Inc.

UK Aug Input PPI -0.5% on Month; +0.7% On Year UK Aug Input PPI Was Forecast -0.2% MM; +0.9% YY UK Aug Output PPI +0.1% on Month; +2.5% On Year UK Aug Output PPI Was Forecast +0.1% MM; +2.4% YY

ECB Leaves Refi Rate Unchanged At 4.0% ECB Leaves Deposit Rate Unchanged At 3.0%

Bank Of England Leaves Bank Rate Unchanged At 5.75% CPI May Remain Around, Little Below 2% Target BOE: Closely Monitoring Quantities Of Credit Extended Margin Of Spare Capacity Appears Limited

LONDON (Dow Jones)--U.K. manufacturing output slumped in July, reversing the recent positive trend, led by a drop in the manufacture of transport equipment. Figures released by the Office for National Statistics Thursday showed that manufacturing output fell 0.3% on the month in July - the first decline since a 0.8% fall in February this year. On the year output rose 0.8%. That compares with a 0.1% rise on the month in June and a 1.0% annual gain. A Dow Jones Newswires survey of economists had forecast manufacturing output would rise 0.2% on the month and 1.2% in annual terms. The June data were revised from a 0.2% monthly gain and a 0.9% year-on-year increase, ONS said. Despite reporting the first drop in five months, an ONS spokes person said that this didn't signify the end of the recent pickup in the sector as the monthly data is considered a volatile measure of output in the sector and could rise once more in the coming months. Among the six sectors that fell within manufacturing, ONS said the largest fall was a 2.6% drop in transport equipment. That was the largest fall since a 2.8% drop in October 2005 and was driven by a decline in the manufacture of aircraft and the building and repair of ships. Among the seven sectors that rose, the largest gain was a 1.2% monthly rise in the production of paper, printing and publishing. The broader measure of industrial output also slipped on the month in July but by a smaller 0.1%. On the year activity picked up from the June level, rising 0.9% compared with July 2006. Output was weaker than expected, with economists in a Dow Jones Newswires survey forecasting an increase of 0.2% on the month and 1.0% on the year. In June industrial output was flat on the month, a revision from a previously reported 0.1% rise, while on the year production rose an unrevised 0.8%. In the three months to July, data that ONS said presents a more reliable picture of the sector as it smoothes out monthly fluctuations, manufacturing output rose 0.8% from the previous three-month period and was 0.9% higher than the corresponding three-month period a year ago. Industrial production, meanwhile, also rose 0.8% compared with three months earlier and was 0.8% higher compared with a year ago. Copyright © 2007 Dow Jones & Company, Inc.