The UK economy showed unexpected resilience in June, with GDP growing 0.3% for the second quarter, according to data released by the Office for National Statistics on Thursday. The above expectations growth was led by positive services, construction, and manufacturing sectors, although the overall figure was still far below the 0.7% growth from Q1. Sterling initially ticked up as high as $1.359, before reverting back to it’s pre-news level. The FTSE 100 responded positively, rising modestly, with mining stocks like Antofagasta and Glencore leading the charge.
Sterling initially ticked up as high as $1.359, before reverting back to it’s pre-news level.
New data released on Tuesday from HMRC and the ONS revealed that UK payroll employment fell for the sixth consecutive month in July, though the decline was smaller than expected at just 8,000 jobs. This suggests a labour market under pressure but not in freefall. Meanwhile, wage growth remains robust, with regular pay rising at an annual rate of 5.0%. The Bank of England faces a complex challenge: balancing elevated wage inflation against weakening employment figures. With vacancies falling across most sectors, the jobs market appears to be cooling, but the persistence of wage growth could delay any potential interest rate cuts.
Wage growth remains robust, with regular pay rising at an annual rate of 5.0%.
In corporate news, Centrica saw its stock rise 3% on Thursday after announcing a £1.5bn acquisition of the Isle of Grain LNG terminal from National Grid. This move strengthens Centrica’s position in the UK’s energy infrastructure and signals a long-term bet on liquefied natural gas as a key transitional fuel.
Our specialist's final thought
"The acquisition is expected to enhance supply security and reduce exposure to volatile global energy markets, especially as Europe continues to diversify away from Russian gas."
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