UK: Economy booming - ING

James Knightley, Chief International Economist at ING, explains that the UK has released a raft of decent data for July and the headline figure being the GDP number – the ONS' new monthly series – which showed the economy apparently growing 0.3%MoM in July, well ahead of the 0.1% consensus and faster than the 0.1% growth rate of June.

Key Quotes

“This means the 3M/3M change is 0.6%, which is the best figure since August last year.”

“Services sector output rose 0.3% while construction was up 0.5% and production industries increased 0.1%. As such it supports the Bank of England’s decision to raise rates last month.”

“Separately, the trade numbers showed a sharp narrowing in the goods deficit to a five-month low of £10.0bn while the total trade deficit for July shrank to just £111mn - £2bn smaller than predicted by the market.”

“Remarkably, this is the fourth best monthly trade balance figure in the past 20 years with the real encouragement being that it was caused by a jump in exports rather than purely slower imports.”

“These are great figures and suggest there is still life in the UK economy despite all the negative political headlines and the pressures faced by the household sector.”