GBP/USD at 1.5530 as U.K. Recovery Gathers Pace

Britain’s economic recovery is showing signs of strengthening, with indexes of confidence, output and employment rising, according to a survey by BDO LLP.

A gauge of company output expectations increased to 94.4, the highest since June 2012, from 94.1, and a business confidence index rose to 93.6 in May, the most in a year, from 93 in April, the accountancy firm said in a report in London today. A measure of employment intentions rose to 96.6 from 94.4. Still, the output index remains below the 95 level that points to positive growth one quarter ahead.

Bank of England policy makers last week left their bond-purchase target unchanged at 375 billion pounds ($583 billion) as Governor Mervyn King said there are “signs now of a recovery.” Growth nevertheless remains fragile, with lending by banks declining in the first quarter despite an extension of the bank’s Funding for Lending Scheme in April and increased incentives to get credit to smaller companies.


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