LONDON, UNITED KINGDOM – The City of London, widely known as the Square Mile and the primary central business district of the capital, witnessed positive economic developments as flash figures released by the Office for National Statistics on Thursday indicated a 0.4% growth in the U.K. economy for May. This surpassed the 0.2% expansion forecasted by a Reuters survey of economists.
The British economy emerged from a shallow recession in the first quarter, but saw no growth in April. However, the dominant services sector grew by 0.3% in May, while production and construction sectors both rebounded with respective increases of 0.2% and 1.9%.
In reaction to the promising economic data, the British pound climbed to a four-month peak against the U.S. dollar, trading at $1.2859 by 7:17 a.m. in London, marking its highest value since March 8, 2024, as reported by LSEG data.
This broad-based recovery comes at a fortuitous time for the newly-elected Labour government. Prime Minister Keir Starmer, who has just taken office, is likely to be buoyed by these early signs of economic resilience. The Labour Party’s recent electoral victory was marked by a platform focused on spurring economic growth, improving housing, and effective planning.
Last week, Goldman Sachs revised its growth forecast for the U.K. upwards in light of Labour’s substantial win. Analysts note that the party’s significant parliamentary majority and business-friendly rhetoric suggest a generally supportive environment for U.K. assets going forward.
The unexpected growth figures and the resultant surge in the British pound provide a positive backdrop for Prime Minister Starmer’s initial days in office. As the government begins to implement its economic agenda, the City of London’s influential financial sector will be closely watching for further signs of sustained recovery.
This story is developing and will be updated as more information becomes available.
Original Story https://www.cnbc.com/2024/07/11/uk-economic-growth-may-2024.html
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