British Economy y Mildly Boosted By A Rate Announcement
UK economy has slightly improved in May on much clearer rate path from the Bank of England. According to the Office for National Statistics, GDP report indicated that the economy rose 0.3%, comparing to April, marking a 5-month maximum. In annual terms, the economy increased 1.5%. The Pound reinforced versus greenback after the news broke.
An economist at RBC Capital Markets, Cathal Kennedy claimed the data raises chances for an August rate raise by 25 basis points to 0.75%, saying: "The gradual momentum into May really backs up what the Bank has been saying of late. We have seen a bounceback from the first quarter".
Among factors, that helped the economic improvement, economists noted warm weather and spending around the royal wedding of Prince Harry and Meghan Markle as services industry rose 0.3% mom. Industrial output, however, dropped 0.4%. Manufacturing growth lifted only 0.4%, much lower than the Reuters projection. Construction output grew 2.9%. Trade goods deficit remained at 12.362 billion pounds (16.37 billion dollars).