A big jump in construction helped boost the British economy to a better-than-expected quarterly growth rate of 1.1 percent and nearly doubling the expected growth rate of 0.6 percent.
George Buckley, economist at Deutsche Bank, said: “This is a very strong rise. It is good news to the extent that the recovery seems to be gaining traction, the bad news is that it is going to take a long time before we get back to the peak levels we saw at the start of 2008.”
Source: BBC News
Early expectations stood on a growth rate of 0.6%, double the growth rate of Q1. The actual result, 1.1%, is almost double the early forecasts and almost 4 times the growth rate in Q1. Lets see the lines:
Read the rest of the article about the British growth.
The British Chambers of Commerce (BCC) predicted today that the British economy continued to grow at a rate of between 0.6 and 0.7 percent for the second quarter of the year. The prediction was based on a survey of 5,600 businesses.
The survey also confirms that while manufacturing totals have increased, the service sector continues to struggle. David Frost, Director General of the BCC, also noted that overall, the BCC was pleased with the recent budget passed by the Tory-led coalition government.
“What businesses have continued to tell us is they wanted the government to deal with this huge deficit and clearly the emergency budget went down well with our members because action was taken,” Frost said.
“But equally business knows that it’s going to hit them in major parts of the UK.”
Source: BBC News
Inflation in the U.K. rose to the highest in 17 months in April, and the reading was downplayed by Bank of England Governor Mervyn King as he said that the surge is “temporary” and masks slack in the British economy.
The Bank of England’s Monetary Policy Committee unanimously supported maintaining the current benchmark lending rate of 0.5 percent. The MPC also voted to keep the quantitative easing program capped at £200 billion (US$307.2 billion).
Of note however, the minutes of the meeting did suggest a growing concern over the level of inflation creeping into the British economy:
“There was a range of views among Committee members about how the balance of risks to inflation and activity had altered over the past few months.”
Source: London Times
