LIVE MARKETS-"Disappointing" British GDP keeps August BoE rate cut alive
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
"DISAPPOINTING" BRITISH GDP KEEPS AUGUST BOE RATE CUT ALIVE
Britain's economy unexpectedly contracted in May, a second month of negative GDP growth that finance minister Rachel Reeves described as "disappointing".
Weak growth will likely allow the Bank of England to lower the Bank Rate when it meets in August with markets pricing an almost 80% chance of a 25 basis point move.
"For now, weakness in GDP will cement some on the MPC’s fears that demand is loosening faster than expected," writes De utsche Bank chief UK economist Sanjay Raja.
"An August rate cut looks almost certain."
Morgan Stanley chief UK economist Bruna Skarica also believes the BoE will accelerate rate cuts on more evidence of building slack in the economy that will translate to disinflation.
Others are less gloomy about the state of the UK economy.
"A swathe of more positive indicators for June suggest that the UK economy will avoid a protracted slowdown," says Berenberg's senior UK economist Andrew Wishart.
He points to improving PMI, rising job openings and a recovery in home buyer enquiries and sales.
Pantheon Macroeconomics also expects a rebound in June.
"We don’t think the data are as bad as they look," says Rob Wood, its chief UK economist, who is sticking with his call for 0.2% growth in Q2 as a whole.
"All told, we think the MPC are too downbeat about underlying growth momentum," Wood adds.
(Samuel Indyk)
EARLIER LIVE MARKETS POSTS:
HSBC SEE AN ODD, AND ENTICING THING IN ASIAN EXPORT DATA CLICK HERE
EUROPEAN STOCKS FLOUNDER AS TARIFF WORRIES RESURFACE CLICK HERE
EUROPE BEFORE THE BELL: FUTURES WOBBLE ON NEW TARIFF THREATS CLICK HERE
NEW TARIFF DRAMA JOLTS COMPLACENT MARKETS CLICK HERE
Related Articles
Why the Yen Falls Further the More It Is Rescued: The Answer Lies in Japan’s Own Structural Contradictions
TradingKey - Entering early 2026, the attention of global investors is once again locked on the Japanese Yen (JPY). Despite the Bank of Japan (BoJ) gradually raising policy rates to a range of 0.5% - 0.75%, marking a definitive end to the era of negative interest rates, the yen continues to trend lower against the U.S. dollar.
What Is the Best Nuclear Energy Investment in 2026? Which Should You Buy in, OKLO or Nuclear Energy ETFs?
TradingKey - Demand for electricity is surging, and data centers designed for artificial intelligence are a big reason. Governments are also demanding cleaner, dependable power. This coupling has brought about a revival in nuclear power, with capacity expected to increase in the coming decades. To i
Stock Market Crash 2026: What Fed Signals and Economic Data Mean for Investors
TradingKey - The possibility of a stock market crash occurring in 2026 is becoming increasingly likely as investor sentiment continues to decline.
New Fed Chair Warsh Takes Office: Major Shift in Monetary Policy? US Dollar Short-Term Rebound, 2026 Investment Strategy Analysis
TradingKey - At the start of 2026, global financial markets witnessed a major leadership change as U.S. President Trump officially nominated Kevin Warsh as the next Federal Reserve Chair. Pending Senate confirmation, he will succeed Jerome Powell this May to lead the world’s most influential central bank.
