UK Economy Grows Faster Than Expected, GDP Revised Up At 0.7%

United Kingdom's economy unexpectedly picked up in the three months through June, accelerating the pace of growth seen a quarter before, preliminary data from the Office for National Statistic showed Friday.

The London-based ONS said UK's second-quarter Gross Domestic Product (GDP) expanded to 0.7% growth in the second quarter from 0.3 percent a quarter ago, beating the advance reading and expectations of 0.6 percent growth.

The second reading on UK annual GDP figure was revised upwardly at 1.5 percent from 0.3 percent in the year ended first quarter while beating 1.5 percent growth expected by analysts'. It was the first time since 2011 that the UK economy has seen a fast pace of quarterly increases, after a 0.3 percent growth at the beginning of this year.

All parts of the economy contributed to the uplift, with exports climbing 3.6 percent from 0.1 percent drop, sharply exceeding expectations for 1.5 percent. Government Spending increased to 0.9 percent in the second quarter.

We've seen a round of upbeat data out of the UK recently, suggesting the economy is on sustainable path of economic recovery. Improvements in retail sales, the labor market and house prices data, all signaled consumer are driving back the economy into safety.

Last week, minutes of the meeting of the Bank of England's Monetary Policy Committee showed the forward guidance policy issued by Bank of England governor Mark Carney failed to get the full backing of the Bank's monetary policy chiefs

Policy makers lacked unanimity on Governor Mark Carney's guidance linking interest rates to unemployment at the last meeting with Martin Weale, who backed the forward guidance policy, voting against the policy as he wanted the Bank to adopt a tougher stance to manage inflation if it continued to defy the Bank's 2% target.

Jobs data also released last week, showed unemployment rate averaged 7.8% in the three months to June, well above the bank's target, yet figures showing a decline of 29,200 people claiming out-of-work benefits in July suggested the jobless rate may fall more quickly toward the BOE's 7% by the end of 2016 target.

The volatile GBPUSD is trading up again around 1.56324, after the pair starter Fridays' session at 1.55860. the pair has so far recorded a high of 1.56360.

IMOH, Clement I.
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