Thousands of bathers enjoy hot and sunny weather on Brighton Beach in East Sussex. An alert of amber thermal health is active on a national scale, with temperatures which should reach 34 ° C, during the fourth heat wave of the United Kingdom of the year.
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The British economy extended from 0.3% better than expected in the second quarter, according to preliminary estimates from the United Kingdom office for national statistics on Thursday.
The economists interviewed by Reuters expected the gross domestic product (GDP) of the country to extend from 0.1% lukewarm during the period, against exceptional growth of 0.7% in the first quarter.
The month in months, the economy increased by 0.4% in June after a contraction of 0.1% in May, having failed to get rid of the impact of American prices and commercial uncertainty.
“The economy was low in April and May, certain activities that were advanced in February and walk before the changes in stamps and prices, but then recovered in June,” said Liz McKeown, director of economic statistics of the ONS, commented on Thursday. The stamp right refers to a tax on purchases of goods.
During the second larger quarter, growth was led by services, with computer programming, health and vehicle rental gaining momentum. Construction has also increased, while production has slightly fell. The quarterly growth has also been stimulated by the updated source data for April which, while showing a contraction, was better than initially expected, according to the ONS.
“The services also led growth in June with scientific R&D, engineering and sales of cars all of a solid month. Within the production, which recovered, the manufacture of electronics worked particularly well,” noted McKewn.
The British book was stable against the dollar after the data version, at $ 1,3,577.
Bounce little likely to continue
British Chancellor Rachel Reeves said the latest data was positive, but “there is no longer to deliver an economy that works for workers”.
“I know that the British economy has the key ingredients for success but feels too long stuck,” she said.
Sharon Graham, the secretary general of united union workers, said that the Chancellor’s budgetary rules, forcing the government’s loan, “chained the economy”.
She added that “workers cannot wait forever to invest in our public services and our industry” in the comments sent by e-mail.
Houses in Whitby, Yorkshire, United Kingdom
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Economists said it was unlikely that positive impetus will continue until the third quarter.
After a fort of the year, the British economy “took a break” in the second quarter, said George Brown, principal economist at Schroders, in the comments sent by email after the data press release.
“However, hopes of a net rebound are likely to be wiped out. The job market has softened, and capacity constraints mean that even lukewarm growth generates inflation pressures. In this spirit, we expect the Bank of England to have rates pending for the rest of the year,” he noted.
Ruth Gregory, deputy chief economist in the United Kingdom at Capital Economics, also asked if the economy will maintain this rate of growth.
“The low global economy will remain an obstacle to the GDP growth of the United Kingdom for a certain time. Complete traction on commercial investments in April tax increases has not yet been felt. And continuous speculation on additional tax increases in the fall budget will probably allow prudent mood consumers. However, today’s publication suggests that the risks for our forecasts In 2025 are now on the rise, “she said.
Boe cut
In a statement last week, the BOE said that its monetary policy committee “remains focused on the abolition of any existing or emerging persistent inflationary pressure, to return inflation in a sustainable manner to its objective of 2% in the medium term”.
He also noted that the growth of GDP underlying in the United Kingdom “has remained moderate, in accordance with a continuous and progressive loosening on the labor market”.
“A margin of relaxation is deemed emerging in the economy. Inner and geopolitical risks of the decline and geopolitics concerning economic activity remains, although the uncertainty of commercial policy has decreased somewhat,” said the bank, taking into account the trade agreement of the United Kingdom with the United States and the basic tariffs of 10% on its exports to the States.
The MPC was initially divided on the reduction or holding of interest rate with four members wishing to hold rates, four others voted to reduce and a policy decision -maker voted for a drop of 50 points of 50 basins. The Committee then held a second voting round to reach a majority decision to reduce the rates of 25 basic points.
Voting is a reflection of the “finely balanced situation” with which the MPC is currently confronted in terms of factors stimulating monetary policy, according to the governor of BOE Andrew Bailey.
“There is an increase in inflation, and especially to know if … This current increase could persist a little more than what we expect. We do not expect it to be really, but could it?” Bailey told Ritika Gupta from CNBC in an interview. “But … this must be set in the context of the conditions of the labor market, which seem to soften.”
