U.K. economic growth accelerated in the second quarter of the year, helped by a big jump in oil and gas production as well as business services and finance sector strength. The 0.7 percent increase in gross domestic product came in line with consensus and marked a 10th straight expansion and followed a 0.4 percent advance in the previous three months.
The report suggests the recovery remains uneven and led by the dominant services industry, where growth accelerated to 0.7 percent. While oil and gas helped industrial output rise 1 percent on the quarter, the most since the end of 2010, manufacturing declined 0.3 percent. Construction was flat during in the period, recovering from a slight fall in the previous quarter.
“After a slowdown in the first quarter of 2015, overall GDP growth has returned to that typical of the previous two years,” Joe Grice, chief economist at the Office for National Statistics, said in a statement. The rebound takes GDP per head “back to broadly level with its pre-economic downturn peak” in the first quarter of 2008, he said.
The data “bring the likelihood of a rate rise later this year that little bit closer,” said Chris Williamson, chief economist at Markit in London. “Though policy makers will be keenly watching the data flow over the coming months to ensure the economic upturn remains on track and able to withstand higher borrowing costs.”
US consumer sentiment plumbed its lowest level in 10 months, falling short of expectations for little change in July, as turmoil in Greece and China stirred global financial markets. The index of consumer confidence fell to 90.9 from 99.8 in June, according to the Conference Board. Economists had forecast the index to remain relatively stable at a reading of 100.
The reading marked its lowest level since September 2014. The June figure was originally reported at 101.4.
Lynn Franco, director of economic indicators with the Conference Board, said that the index remained in territory that suggested an "expanding economy", but that short-term expectations had deteriorated.
“A less optimistic outlook for the labour market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers' confidence. Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer.” She went on to say.
GBP - 19:00 :UK Federal Reserve Interest Rate Decision expected to remain unchanged at 0.25%