020 7898 0500Sterling moved slightly on Friday morning as we saw some good news for the UK. The final revisions to economic growth figures for the second quarter of 2016 were released. This was revised higher, from 0.6% to 0.7%. It was still a slowdown compared with the first quarter, but given the current Brexit limbo it was welcomed. The current account deficit widened from £27 billion in the first quarter to £28.7 billion in the second, or 5.9% of the Gross Domestic Product (GDP). While the current account has widened it is not by as much as had been expected.
Looking to the week ahead, the UK has a big week in terms of economic data especially since the Bank of England (BoE) stated last month that they are prepared to reduce rates further. The headline Purchasing Manager Indices (PMIs) are released this week. Starting today, the key PMI for manufacturing is due for release, which is expected to show continued growth, albeit at a slower pace than we saw last year. On Tuesday, the PMI data for the construction industry is due. This is expected to paint a bleak picture of the sector as it has been forecasted to contract for a fourth consecutive month. Inevitably, this will not help the housing sector. The Services PMI will be the highly anticipated figure as the sector accounts for close to 75% of the economic activity in the UK. The number is due on Wednesday and like the manufacturing data is expected to show continued growth albeit at a slower pace. The slower pace of growth will be of the biggest concern to analysts.
Meanwhile, on Friday we have another reading on the house price index and manufacturing due.
