The Conference Board Leading Economic Index™ (LEI) for the U.K. increased 1.0 percent, and The Conference Board Coincident Economic Index™ (CEI) increased 0.1 percent in October.

The Conference Board LEI for the U.K. increased for the seventh consecutive month in October as volume of expected output, the yield spread and consumer confidence made the largest positive contributions to the index. Between April and October 2009, the leading economic index increased by 6.3 percent (about a 12.9 percent annual rate), a sharp reversal from the 4.5 percent decline (about a -8.8 percent annual rate) between October 2008 and April 2009. In addition, the strengths among the leading indicators have become very widespread, with all of the components increasing during the last six months.

The Conference Board CEI for the U.K., a measure of current economic activity, increased in October for the fourth time in the past five months. Between April and October 2009, the coincident economic index increased by 0.1 percent (about a 0.2 percent annual rate), after falling by 1.4 percent (about a -2.9 percent annual rate) during the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. Meanwhile, real GDP contracted at a 1.2 percent annual rate during the third quarter of 2009, following a decline of 2.3 percent annual rate during the second quarter.

After falling steadily between the middle of 2007 and the first quarter of 2009, The Conference Board LEI for the U.K. has risen sharply during the past seven months. Its six-month growth rate has continued to pick up, reaching the highest rate since 1978. Meanwhile, The Conference Board CEI for the U.K. has been mostly rising starting in June, with its six-month change becoming positive for the first time in more than a year. Taken together, the recent behavior of the composite indexes suggests that the downturn in economic activity is bottoming out and that economic conditions will continue improving in the months ahead.

LEADING INDICATORS

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

With the 1.0 percent increase in October, The Conference Board LEI for the U.K. now stands at 96.5 (2004=100). Based on revised data, this index increased 1.1 percent in September and increased 1.1 percent in August. During the six-month span through October, the leading economic index increased 6.3 percent, with all seven components advancing (diffusion index, six-month span equals 100.0 percent).

COINCIDENT INDICATORS

Three of the four components that make up The Conference Board CEI for the U.K. increased in October. The positive contributors - from the largest positive contributor to the smallest - were real household disposable income, retail sales and employment. Industrial production remained unchanged in October.

With the increase of 0.1 percent in October, The Conference Board CEI for the U.K. now stands at 102.7 (2004=100). Based on revised data, this index increased 0.1 percent in September and decreased 0.1 percent in August. During the six-month period through October, the coincident economic index increased 0.1 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).