Growth Figures OK, But Rate Rise Talk Overdone


growingmatchstick

The going's been tough, but now, at last, the tough get growing...

Today's Gross Domestic Product (GDP) figures for the second quarter of 2015 have brought some happier news. There was some concern when the economy only delivered 0.4 per cent growth in the first quarter and this was partly attributed to the impending election. The economy grew by 0.7 per cent in the second quarter and at an annual rate of 2.6 per cent. Interestingly, GDP is now 5.2 per cent higher than the pre-economic crisis peak of the first quarter of 2008. It took us a long time to get there, which has been reflected in poor wage growth and dismal productivity figures post-crisis.

At the start of the last Parliament, the Chancellor stated that his ambition was to achieve more balance in the UK economy, which he regards as having an unhealthy dependence on the services sector. This remains the case with services representing 78 per cent of the economy.

The latest figures show that services grew by 0.7 per cent in the second quarter and production by 1 per cent whilst construction was flat and agriculture declined by 0.7 per cent. Production was led by a strong performance from the mining and resources sector, whilst manufacturing fell by 0.3 per cent having only increased by 0.1 per cent in the first quarter. The manufacturing sector is being held back by a prolonged period of underinvestment and by the strength of sterling against the euro. There is a need for manufacturing businesses, which include many SMEs to invest in order to increase productivity and to be better able to compete internationally. This is where Money&Co. can help.

Lacklustre manufacturing, construction and retail sales figures make a rate rise less likely

As ever, there is a mixed performance underlying the headline figures and there is much that needs to be done to improve the UK's economic performance. It is good news that the economy is now above the pre-crisis peak seen in early 2008, but it took us much longer to get to that point than Germany and France. There is talk of interest rates edging up later this year to combat inflationary pressures that could result from increased economic activity, but the lacklustre performance of the manufacturing and construction sectors and the weaker than expected retail sales figures last week make this less likely than some believe.

We continue to see a high level of demand for borrowing from small and medium-sized companies in the UK, who have found it difficult to borrow from banks. The availability of credit through platforms like Money&Co. should assist in allowing the UK to maintain strong economic growth over the coming months.

MoneyCoBlogLogo

*** Are you registered with Money&Co.?

Our registered users had the opportunity to claim a ticket at the recent Discovering The Power Of The Crowd conference at a discount of £40 to the full £190 price, which included a star-studded line-up of speakers, lunch and networking drinks. We are planning another conference in Exeter on 17th September, and another in London in October, with full detail to be released soon.Register to make loans and to benefit from future conference discounts by signing up here. It takes just a few minutes.



FOLLOW NICOLA ON TWITTER
FOLLOW MONEY&CO. ON TWITTER

Search blogs

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More from blogs

2019
2018
2017
2016
NovemberOctoberSeptemberAugustJulyJuneMayMarchFebruaryJanuary
2015
DecemberNovemberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuary
2014
DecemberNovemberOctoberSeptemberAugustJulyJune

Search news

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More news

2019
NovemberOctober
September
August
July
June
May
April
March
February
January
2018
DecemberNovemberOctoberSeptemberAugust
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
MayMarchFebruary



Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.