Resilience British economy
According to Matthew Ryan, Head of Market Strategy at Ebury, However, there is reason to temper optimism, since modest growth of 0.3 percent still means a sharp delay compared to what was probably a one -off revival earlier this year.
He points out that due to higher National Insurance levies and the increase in the minimum wage in the second quarter, the dtijing costs pressed into business activity, while exports decreased after the introduction of the American rates under Trump. “In addition, households remain under pressure due to the fall in the growth of the real disposable income and the worrying deterioration of the labor market.”
The prospect for the rest of the year is not particularly rosy, says Ryan. “The cooling labor market and the impending further tax increases will probably print the consumer spending. A decrease in loan costs, in particular mortgage rates, and the expected decrease in British inflation, which is expected to peak in September, could cause any lighting.”
According to Ryan, the stronger than expected GDP figures should reduce the pressure on the Bank of England to further reduce interest rates. “Markets now count on a break during the next MPC meetings in September and November. We think that this should continue to support the pound in the rest of 2025 relatively well.”