The UK’s Gross Domestic Product (GDP) pleasantly surprised observers this morning by surpassing expectations. It revealed that the economy expanded by 0.2% during the second quarter of 2023. While a 0.5% increase in GDP is indeed a reason to celebrate, the significantly elevated figure may entail certain consequences, such as the possibility of another interest rate hike. Today’s GDP figures appear to have all but confirmed an impending rate hike at the next meeting. It’s worth noting that the Bank of England (BoE) has recently raised interest rates for the 14th consecutive time, bringing them to 5.25%.
Nonetheless, many economists contend that the June uptick in GDP can be attributed primarily to the additional bank holiday tied to the coronation. They argue that factors such as warm weather, labor strikes, and the occurrence of bank holidays make it challenging to accurately assess the overall health of the economy
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