The British economy grew by 0.5% in June, taking the quarterly figure for April to June to 0.2%. The pound responded immediately, but only strengthening by around 0.1% to 0.2% against the euro and US dollar and it remains down on the week overall, for now.
GDP (gross domestic product) data released by the UK’s Office for National Statistics this morning showed that the 0.5% monthly rise was mainly due to a 1.6% growth in manufacturing, plus strong growth in household and government consumption. However, the UK economy remains the only advanced economy still weaker than pre-pandemic.
The other big news of the past 24 hours has been US inflation, which rose to an annual rate of 3.2% in July 2023, from 3% a month earlier. However, although a rise, the first increase following 12 consecutive months of declines, it was smaller than the 3.3% the markets were expecting.
Following US CPI data, the euro edged higher against the US dollar yesterday, taking its weekly gains to 0.5%.
US core consumer prices, which exclude volatile items such as food and energy, rose by 0.2% in July, matching June’s advance and market expectations. The shelter index was the largest contributing factor which grew 0.4%.
Markets were dominated by US data yesterday as the jobless rate increased by 21,000 people, a surprising 19,000 more than expected. This marks a one-month high and suggests the labour market is starting to soften.
In business news, British retailer Wilko became the latest high-street store to fall into administration yesterday, as owners failed to find new funding, putting 12,000 jobs at risk.
The British government is reported to be considering tighter rules on investment in China, following new measures put in place by the US government. A spokesperson for the British government said yesterday, “The UK will consider these new measures closely as we continue to assess potential national security risks attached to some investments.”
In housing, figures released yesterday by the Ministry of Justice showed that UK court proceedings for no-fault evictions have soared to a six-year high, ahead of new rules being passed to ban the practice.
Following Elon Musk’s rebrand of Twitter, now X, the tech entrepreneur plans to auction off Twitter memorabilia from its San Francisco headquarters. This comes after Musk said cashflow was still in the red following a 50% drop in ad revenue and a heavy debt load. He also announced plans for a video calling service for the platform.
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