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UK recovery gaining momentum

UK recovery gaining momentum

Business confidence in the UK is at its highest level since 2007 on buoyant export demand, indicating the economic recovery is gaining momentum. The British Chamber of Commerce (BCC) quarterly economic survey reported business confidence improved further and is stronger than average levels seen during the recession. Expectations for an improvement in sales rose by 7 points to 51% in the manufacturing sector while the service sector reported a 6 point rise to 46%. The feel good factor is also being seen in the UK construction sector where the PMI index rose for the second consecutive month, boosted by government housing market initiatives.

Growth in output and new orders pushed the Construction PMI index to 51.0 in June, the highest level since May 2012 and up from 50.8 in the previous month. This adds to a list of upbeat indicators pointing to a healthy Q2 for UK GDP.

The euro slipped against the US dollar ahead of tomorrow’s ECB press conference following speculation that ECB president Draghi is coming under pressure from colleagues to take further action such as cutting interest rates or providing forward guidance on policy.

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