Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

UK Q2 GDP growth to rebound after Q1 battered by 'Beast from the East'

Aside from the first reading for the second-quarter GDP numbers, the latest UK industrial, manufacturing production, construction output, and balance of trade numbers are all due on Friday
UK economy
Laith Khalaf, senior analyst at Hargreaves Lansdown expects Q2 GDP to rebound to 0.4% after 0.2% growth in the first quarter

At the end of a fairly busy week for corporate news, Friday’s results diary is almost bare, with just a handful of small-cap numbers on the agenda.

The main focus for traders then will be on UK macroeconomic factors, with the first reading for second-quarter GDP due at 9.30am.

Expectations are that economic growth during the period will have been higher than in the first quarter where severe weather conditions had their part to play.

Laith Khalaf, senior analyst at Hargreaves Lansdown expects second-quarter GDP to rebound to 0.4% after measly 0.2% growth was recorded in the first quarter, after the ‘Beast from the East’ shut down much of the country for a few days in February and March.

He said: “The second quarter was altogether brighter, with good weather, a Royal Wedding and the World Cup all driving consumer behaviour. The latest ONS retail sales data suggests that food and drink sales have been positively impacted by the sunshine and the football, while spending in pubs also increased by 9.5% year on year in June according to Barclaycard’s consumer analysis.”

Instant egg otherwise for BoE

But, the analyst added, if tomorrow’s growth number proves disappointing, “the Bank of England could find some pretty instant egg on its face after its decision to raise interest rates last week.”

The Bank of England expects GDP growth to average just 1.75% in the next three years, and Khalaf said that means a very slow tightening of monetary policy, assuming no economic shocks.

Aside from the GDP numbers, UK industrial and manufacturing production data are also due out on Friday, with both expected to jump by 1.9% year-on-year during June, possibly partly supported by a weaker sterling.

However, UK construction activity is expected to once again lag behind and possibly fall by 0.5% while housebuilding activity moderates.

Significant events expected on Friday August 10:

Interims: Afrak Group PLC (LON:AFRK), Vitec Group PLC (LON:VTC)

Trading update: Volution Group (LON:FAN)

Economic data: UK Q2 GDP; UK industrial, manufacturing production; UK construction output; UK balance of trade

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use