UK Economy Fastest Growing in G7

Britain’s economy will grow faster than any other G7 nation in coming quarters, but the Bank of England will not raise interest rates until next year to avoid choking off the recovery, a Reuters poll showed on Wednesday.

The poll of over 50 economists, taken this week, suggested Britain’s gross domestic product (GDP) will grow 0.6 percent per quarter through to September 2015.

If those forecasts are met, Britain’s economy will be back to its pre-crisis size by the end of June and be the fastest growing amongst the group of seven major industrialised nations.

“The story on the UK remains very positive, with business surveys pointing to robust activity, confidence indicators bouncing strongly, credit growth strengthening and asset prices rising,” said James Knightley at ING.

Britain’s economy will expand 2.7 percent this year and 2.4 percent in 2015 and 2016, similar to forecasts made by the Organisation for Economic Cooperation and Development (OECD) on Tuesday.

The euro zone economy, Britain’s main trading partner, is expected to eke out just 1.1 percent growth this year and 1.4 percent next, with any deterioration in that highlighted as a risk to British growth.

Quarterly forecasts were unchanged from a February poll and despite the upbeat outlook the latest survey again said it would be next year before the BoE raised interest rates from record lows – and even then by only 25 basis points.

via Reuters

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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