City of London skyline on June 10, 2024 in London, England. The City of London is a city, ceremonial shire and local government area containing London’s main central business district (CBD). The City of London is widely known simply as “The City” and colloquially as “The Square Mile”.
Mike Camp | In Pictures | Getty Images
LONDON – The British economy grew by 0.4% in May, data from the Office for National Statistics showed on Thursday, with the pound jumping to a four-month high against the dollar following the news.
A Reuters survey of economists showed gross domestic product (GDP) rose above forecasts for a monthly increase of 0.2%.
UK economy emerges from shallow recession in first quarter, then April flat.
In May, the country’s leading service industry continued to grow by 0.3%, and production and construction output both rebounded from losses, growing by 0.2% and 1.9% respectively.
London Stock Exchange data showed that the pound was up 0.14% against the dollar at $1.2863 as of 8:30 a.m. London time, which was the highest level for the pound against the dollar since March 8, 2024.
A broad recovery will be welcomed newly elected labor partyPrime Minister Keir Starmer begins his first week in office.
Goldman Sachs last week Growth forecast raised The centre-left Labor Party won a landslide victory in the British general election. The party’s election platform revolves around Promoting economic growth, housing and planning.
The party’s majority in parliament and its pro-business message have led analysts to describe the government as General support for UK assets.
In a note, Capital Economics UK economist Ashley Webb highlighted the trend of UK GDP growth in recent months – barring a lack of growth in April – “which supports The idea is that both rising interest rates and higher interest rates are a drag on economic activity.
UK price growth has cooled down from a 41-year high of 11.1% in October 2022 Below the Bank of England’s 2% target May this year. The performance sparked expectations that the Bank of England would soon cut interest rates.
However, the Bank of England continues to Cautious tone Even after their counterparts at the European Central Bank began taking action of their own, The road to interest rate cuts, warned that a key indicator of UK inflation persistence “remains at elevated levels”. Market views on the prospect of a rate cut at the August meeting were broadly unchanged.
labor agenda
Muniya Barua, deputy chief executive of industry campaign group BusinessLDN, said in emailed comments that the new government is now needed to build momentum for the latest economic growth data.
“With public finances under strain, ministers should follow up on the recent series of growth-boosting announcements by prioritizing high-impact, low-cost measures that, when combined, can help unlock much-needed private investment,” Barua said. system and abolish stamp duty on stock transactions.
Last week new Finance Minister Rachel Reeves Said the Labor Party would Introduce mandatory house building targets, lift the ban on new onshore wind farms in England and reform planning rules. On Wednesday, she announced the launch of a 7.3 billion pound ($9.4 billion) national wealth fund aimed at attracting private sector investment in UK infrastructure projects.
Lindsay James, investment strategist at Quilter Investors, said in a note that the business community is now awaiting Labour’s first fiscal statement, which is expected no earlier than mid-September.
James said this “should provide greater clarity on tax and spending plans. This will allow businesses to better plan ahead, reinvigorating their willingness to invest.”
She added: “However, this will take time to materialize and we are unlikely to see any meaningful acceleration in GDP growth until we have a better understanding of what lies ahead.”
