Commenting on this morning’s UK GDP data Melanie Baker, Senior Economist at Royal London Asset Management, said:
“Despite today’s stronger than expected figures, the UK economy remains at risk of recession. I expect at least one quarter of negative GDP growth this year though, after this May data print, but the likelihood of that quarter being Q2 has slipped.
“Pay growth is not keeping up with inflation, consumer confidence is weak, business optimism is falling and the Bank of England continues to hike rates - and I am expecting at least another 75bp of rate hikes by year end. Energy prices remain an issue and a further large energy bill increase looks set for households in October, though the impact was eased somewhat by previously announced fiscal measures.”
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.