UK economy shows unexpected strength in July, dampening recession fears

By Andy Bruce, Jonathan Cable

 

FILE PHOTO: Workers using a crane can be seen inspecting part of the roof of the Houses of Parliament in London, Britain February 7, 2019. REUTERS/Henry Nicholls/File Photo

 

LONDON (Reuters) - Britain’s economy picked up more than expected in July, data showed on Monday, dampening fears that it will succumb to its first recession since the financial crisis as the Brexit crisis escalates.

 

Economic output in July alone was 0.3% higher than in June, the Office for National Statistics (ONS) said, marking the biggest rise since January and topping all forecasts in a Reuters poll of economists that had pointed to a 0.1% increase.

 

The pound inched higher against the dollar on the figures, which showed the expansion was driven by the dominant services sector — although the ONS said the underlying picture showed its growth weakening through 2019.

 

“While the figures are far from stellar, after a contraction in the second quarter the chances that we see a negative GDP print in the third have now dropped significantly, meaning that a technical recession will likely be avoided,” said David Cheetham, chief market analyst at online broker XTB.

 

The world’s fifth-biggest economy shrank in the second quarter, a hangover from a stockpiling boom in advance of the original March Brexit deadline.

 

While most economists think modest growth will return in the current quarter, a slew of downbeat surveys has shown business activity wilting during the Brexit crisis, especially in August. They point to a risk that the economy will contract again, which would officially herald a recession.

 

The ONS said gross domestic product in the three months to July was flat compared with the previous three-month period. A Reuters poll of economists had pointed to a 0.1% contraction.

 

TRADE TENSIONS

 

Last month, the Bank of England forecast that economic output would grow 0.3% in the third quarter, although its forecast for zero growth in the second quarter proved to be too optimistic.

 

Besides the political crisis at home, the outlook for the economy has dimmed further because of trade tensions between the United States and China.

 

Wednesday’s data showed the services sector, which accounts for almost 80% of British economic output, expanded 0.3% in July after four months of stagnation, the biggest upturn since November 2018.

 

Manufacturing output increased unexpectedly last month, rising 0.3% in monthly terms, while the construction industry also fared better than expected, posting a 0.5% rise in output.

 

Separate figures showed the goods trade deficit increased in July to 9.144 billion pounds from 8.920 billion pounds in June, although this was still a little less than the 9.55 billion pounds deficit economists had forecast.

 

-- © Copyright Reuters 2019-09-09

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Has the pound moved yet......I mean up !......no ,I thought not.

regards worgeordie

Nothing wrong about the UK economy, it's the uncertainty that the markets hate. Whichever way the path pans-out regarding remain or leave for the UK (and the EU for that matter) then the currency will pick back up and the doom mongers will be silenced. All the markets want to know is where they stand and they'll take it from there, and they still don't know that as the UK MPs of all hues have collectively screwed it up monumentally.

Edited September 9, 20196 yr by Brigand

1 minute ago, worgeordie said:

Has the pound moved yet......I mean up !......no ,I thought not.

regards worgeordie

Yes it has..

2 hours ago, transam said:

Yes it has..

It moved up a fraction when Bojo started back tracking on no deal in Ireland - can’t think why ????

 

Odd though - every time Brexit gets diluted the pound goes up, every time Brexit looks real it goes down but it’s absolutely nothing to do with Brexit right lads cos the Aussie dollar is also down against the baht  ???? 

3 hours ago, Brigand said:

Nothing wrong about the UK economy, it's the uncertainty that the markets hate. Whichever way the path pans-out regarding remain or leave for the UK (and the EU for that matter) then the currency will pick back up and the doom mongers will be silenced. All the markets want to know is where they stand and they'll take it from there, and they still don't know that as the UK MPs of all hues have collectively screwed it up monumentally.

Too simplistic

 

If PM Cummings gets his way the doom mongers haven’t even started, the pound will be trashed further - you know that right ?

 

 

3 hours ago, transam said:

Yes it has..

Nope. Bungling Boris has killed sterling as well as the Conservative party.

3 hours ago, worgeordie said:

Has the pound moved yet......I mean up !......no ,I thought not.

regards worgeordie

It has against the USD. Should be about 37.8 to the Baht now.

4 hours ago, transam said:

Yes it has..

     Yep ,  on the strength of  our PM ,  doing time in the nick.

     Prime Ministers  question time , live from Dartmoor .

     You could not make that one up ....

 

 

 

Edited September 9, 20196 yr by elliss

2 hours ago, elliss said:

     Yep ,  on the strength of  our PM ,  doing time in the nick.

     Prime Ministers  question time , live from Dartmoor .

     You could not make that one up ....

 

 

 

You did.

UK economy shows unexpected strength in July, dampening recession fears
 
Economic output in July alone was 0.3% higher than in June, the Office for National Statistics (ONS) said, marking the biggest rise since January and topping all forecasts in a Reuters poll of economists that had pointed to a 0.1% increase.
 
Manufacturing output increased unexpectedly last month, rising 0.3% in monthly terms, while the construction industry also fared better than expected, posting a 0.5% rise in output.

b>

Project Fear and the BOE got it wrong again.

39 minutes ago, Loiner said:

Project Fear and the BOE got it wrong again.

 

 

Surely not !

 

 

How could that be possible ?

Mark Carney has talk the pound down several times, He should ahve been on is bike long ago, He was the one who predicted a plague of locus after Brexit, He is part of the project fear group.

Fear and loathing 

 

Was very clear 2nd quarter results were skewed and fake news was again swallowed by the sheeple, including many on TV.

10 hours ago, fishtank said:

Nope. Bungling Boris has killed sterling as well as the Conservative party.

Sunbeam, it has gone up....

6 hours ago, Thongkorn said:

Mark Carney has talk the pound down several times, He should ahve been on is bike long ago, He was the one who predicted a plague of locus after Brexit, He is part of the project fear group.

Has brexit happened yet?

14 minutes ago, stevenl said:

Has brexit happened yet?

It happened when the UK vote said leave 3 years back.......????

13 minutes ago, transam said:

It happened when the UK vote said leave 3 years back.......????

So what is all the ruckus about in parliament?

10 minutes ago, stevenl said:

So what is all the ruckus about in parliament?

 

10 minutes ago, stevenl said:

So what is all the ruckus about in parliament?

MP's fighting over their personal cash ......

33 minutes ago, transam said:

 

MP's fighting over their personal cash ......

Trolling again.

 

I was refuting a remark by another poster, but again you start trolling.

Project Fear proven to be a load of lies, yet again.

1 hour ago, transam said:

Sunbeam, it has gone up....

Oddly it goes up when the chances of no deal go down.

57 minutes ago, stevenl said:

Trolling again.

 

I was refuting a remark by another poster, but again you start trolling.

Oh, so now I am trolling cos you don't like the answer.....Gawd.....

 

I don't like any of your answers but I have yet to call you a troll, get a grip man..

12 minutes ago, transam said:

Oh, so now I am trolling cos you don't like the answer.....Gawd.....

 

I don't like any of your answers but I have yet to call you a troll, get a grip man..

No, you're trolling because you're not answering, or talking nonsense. To claim the UK has left the EU is simply that, nonsense.

23 minutes ago, stevenl said:

No, you're trolling because you're not answering, or talking nonsense. To claim the UK has left the EU is simply that, nonsense.

You fail to read to implication of the LEAVE vote and business in my reply.

When business SAW we were leaving they would THEN sort their business stuff out because we were leaving. The July figures showed positive....Got it now...?

21 minutes ago, transam said:

You fail to read to implication of the LEAVE vote and business in my reply.

When business SAW we were leaving they would THEN sort their business stuff out because we were leaving. The July figures showed positive....Got it now...?

You're again not making sense. I'm out of here, as mentioned, leave has not been effectuated, so the remark I responded to about project gear is simply nonsense.

10 hours ago, Jip99 said:

 

 

Surely not !

 

 

How could that be possible ?

 

Absolutely. What do the BoE, it's governor, countless economists and academics know anyway?

 

Every good true blue Brexiter knows instinctively that post no-deal Brexit the UK (less Scotland) will be a land of milk and honey fit for unicorns to roam as the economy, currency, and social conditions move into a golden age.

 

Besides Boris, Gove, R-Moog and Farage plc told them. And they wouldn't lie would they?

6 minutes ago, Baerboxer said:

 

Absolutely. What do the BoE, it's governor, countless economists and academics know anyway?

 

Every good true blue Brexiter knows instinctively that post no-deal Brexit the UK (less Scotland) will be a land of milk and honey fit for unicorns to roam as the economy, currency, and social conditions move into a golden age.

 

Besides Boris, Gove, R-Moog and Farage plc told them. And they wouldn't lie would they?

i like Moog, but he should really work on his posture.

20 hours ago, Brigand said:

then the currency will pick back up and the doom mongers will be silenced.

Funny, you will have to deal with EU again. Is there anybody believing you'll get the same granted deal after a no-deal BREXIT as before?????

To put this in perspective, the UK still has access to tariff free trade with the EU and access through the EU to international trade deals.

 

I hear there is a plan to ditch all that.