The continuing weakness in the British economy, evidenced by the recent economic data, is likely to prompt the Bank of England to engage in additional quantitative easing either in December of in the first quarter of 2013, IHS Global Insight Chief European and UK Economist Howard Archer said Wednesday.

The firm said that the disappointing data released recently, after third quarter's better-than-expected GDP rebound, highlight the fact that the UK still has a major struggle on its hand to develop sustainable, decent growth. It, meanwhile, noted that the central bank will likely hold fire on more QE at its November meeting.

Latest data showed that UK's industrial production decreased a bigger-than-expected 1.7 percent sequentially in September, owing entirely to a record drop in oil and gas extraction.

The economist observed that the sharp fall in industrial output signals that third quarter's surprisingly large 1 percent sequential increase in GDP would by revised down, possibly to 0.9 percent. According to Archer, the marginal growth seen in manufacturing output in September was mainly due to seasonal factors. Also, the October survey evidence from both the purchasing managers and the Confederation of British Industry indicates that the manufacturing sector is currently struggling markedly, the economist said.

nderscoring the weakness in overall economic activity, latest data from the the British Retail Consortium revealed disappointingly soft activity in the retail sector, while the Halifax house price survey showed a 0.7 percent fall in residential property prices.

RTTNews