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UK Economy Picks Up

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• July 26, 2017
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Britain’s economy gathered only a little speed in the second quarter after almost stalling at the start of the year, propped up by the services sector and a booming film industry, official figures showed on this morning.

Growth of 0.3 percent on the quarter was up from 0.2 percent in the first quarter, a figure that is likely to cement expectations that the Bank of England will keep interest rates on hold next week at their record low level.

The figure was in line with the median forecast in a poll of economists and it capped off the weakest first half to any year since 2012.

Britain’s economy grew 1.8 percent in 2016 — among the fastest of the world’s seven largest major advanced economies, defying widespread predictions of recession after the vote to leave the European Union.

But the Brexit vote did lead to a big fall in the value of sterling, which has pushed up inflation, gnawing at consumers’ disposable income this year.

The services industry was the only driver of economic growth in the second quarter, helped by retailers, hotels and restaurants, as well as Britain’s fast-growing film industry.

Growth between April and June in year-on-year terms fell to 1.7 percent from 2.0 percent in the first three months of the year, in line with economists’ average forecast.

The figures are unlikely to materially alter the analysis of Bank of England officials gearing up to set interest rates next week. Only two out of 80 economists in a poll published last week thought the BoE would raise rates next Thursday.