GBP
Consumer spending and business investment helped the UK economy to its
longest stretch of growth since the financial crisis. Gross domestic
product rose 0.3 percent in the first quarter, matching an initial estimate,
the Office for National Statistics said in London on Thursday. It was less than
the 0.4 percent increase forecast by economists however. While the economy
has expanded for nine straight quarters the longest sprint since 2008, there is

GBP
Consumer spending and business investment helped the UK economy to its
longest stretch of growth since the financial crisis. Gross domestic
product rose 0.3 percent in the first quarter, matching an initial estimate,
the Office for National Statistics said in London on Thursday. It was less than
the 0.4 percent increase forecast by economists however. While the economy
has expanded for nine straight quarters the longest sprint since 2008, there is
little sign of the shift away from consumer spending promised by David Cameron
five years ago. The prime minister has pledged to use his surprise election
victory this month to boost productivity.
 
“It confirms the picture of somewhat weaker growth in the first quarter than in
recent ones,” said ONS Chief Economist Joe Grice. “But no single quarter’s
figures should be given undue weight.” The figures are the first revision
of GDP after Cameron took office with a Conservative majority in
Parliament. 
 
Consumer spending is being underpinned by zero inflation and rising
wages. While the Bank is expected to maintain rates at a record-low after
it meets next week, earlier rate rises could be back on the agenda for several
monetary policy committee members if post-election certainty leads to
strengthening in economic activity, economists say. Growth is expected to
accelerate in the second quarter.

USD
Applications for US jobless benefits remained below 300,000 for the 12th
straight week, signalling the US labour market remains firm despite how slow
the economy has been to rebound from a first-quarter slump.
 
Jobless claims increased by 7,000 to 282,000 in the week ended May 23, worse
than the median forecast of 270,000. But Readings this low typically coincide
with healthy levels of hiring.
 
Persistently low firings is a strong indication that businesses are planning
for at least steady business demand. As joblessness approaches the Fed’s definition
of full employment, employers might be pressured to boost wages in order to
retain and attract workers. The US economy is starting to get over the
first-quarter slump, when it barely expanded amid a stronger dollar, severe
weather and a labour dispute at West Coast ports. 

Key Announcements
1:30pm – USD – Prelim GDP q/q  forecast to fall from -0.8% to
0.2%

Our dealers are available via e-mail ([email protected]) or by phone (020 7220 8181)