Rolling coverage of the latest economic and financial news, including the latest UK GDP data due at 7am BST
- Economists predict economy gres 0.2% in June, but stagnated in Q2
A trio of bank holidays in May hurt activity in the manufacturing and construction sectors as workers enjoyed the extra days off, points out Victoria Scholar, head of investment at interactive investor.
But that should also provide a “back-to-work boost for the economy” in June, she explains, adding:
According to June’s retail sales figures, the record-breaking heatwave supported sales in supermarkets and department stores, partly driven by high inflation which flattered food sales, lifted by higher prices rather than stronger volumes. Lower fuel prices versus last year during the energy crisis are also likely to provide a tailwind to fuel sales and in turn June’s growth figure.
However, the boiling hot temperatures are likely to have dampened productivity, particularly in agriculture and construction. They also caused problems in the transport sector with passengers on trains and planes facing delays and cancellations.
GDP is seen registering zero growth quarter on quarter and expanding 0.2% year on year.
For this quarter, BE forecasts a gain of 0.1% but that’s probably the last positive news for a while: High interest rates are expected to tip the economy into recession later in 2023.
