UK Economic Growth Boosted by Service Sector

Evidence that the UK economy has bounced back from a soft patch in the opening months of 2018 has emerged after a closely watched survey of the services sector showed stronger than expected activity last month.

In the latest sign that bad weather held back the economy during the first quarter, the health check by the Chartered Institute for Procurement and Supply and IHS Markit reported the strongest growth in eight months.

IHS Markit’s chief economist, Chris Williamson, said the improvement shown by the service sector suggested the economy would expand by 0.4% in the second quarter – double its rate of growth between January and March.

With the June IHS Markit/Cips surveys for manufacturing and construction also beating expectations, the City said chances of an August interest rate rise from the Bank of England’s monetary policy committee (MPC) had increased.

“Stronger growth of service sector activity adds to signs that the economy rebounded in the second quarter and opens the door for an August rate hike, especially when viewed alongside the news that inflationary pressures spiked higher,” Williamson said.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza