Home Business News Positive growth creates space for Bank of England aggression

Positive growth creates space for Bank of England aggression

by LLB Finance Reporter
14th Jun 23 11:50 am

The UK economy grew by 0.2% in April as bars, pubs and retailers fared well, figures from the Office for National Statistics out on Wednesday showed.

This comes after there was a 0.3% fall in March and GDP grew 0.1% over the three months to April and the economic expansion was driven by 0.3% growth in Services sector.

Construction grew by 0.6% and production fell by 0.3% and GDP had been expected to rise 0.2%.

Nicholas Hyett, Investment Analyst, Wealth Club said, “The services sector continues to set the tone for the UK economy, growing 0.3% in April – driven by vehicle sales and repairs together with an uptick in the TV, film and music industries.

“In production it was advanced manufacturing that suffered, with declines in pharmaceutical and computer/electronic products, while private housing work held back construction.

“However, more important than monthly shifts in the economy is what the numbers mean for the future direction of interest rates.

“With wages and prices continuing to rise the Bank of England is expected to raise rates further to stem inflation.

“GDP growth, albeit modest, creates the space for the Bank of England to be more aggressive in its rate hikes. The chances of a 0.5% rate hike just got higher.”

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