Economy

Despite Currency Power, Britain’s Economy Bounces Back

Growing up to 0.7 per cent in the three months to June even if it slowed down to 0.4 in the first three months of 2015, the UK economy is set to rebound immensely for the third quarter of the year. However the strength of the pound is impeding with progress, leaving the Bank of England in a tricky situation as interest rate raises are due for this year.

The figures indicated UK consumers are relying heavily on domestic demand. Businesses and financial services are still up top. Meanwhile, export and factor output had suffered a quarterly fall due to the pound hit.

Despite a huge tax relief cut in March, the oil and gas output had one of the biggest leaps in a generation.

The strength of the pound may impede raising prices as it may further strengthen. The Bank of England might not need to have higher interest rates at such point. This leaves Bank of England Governor Mark Carney to balance between the two points. He may decide dependent on the banks’ latest economic forecasts, which indicate a better economy.

Meanwhile, the Office of National Statistics report that British economic output had risen by 2.6 per cent and output per head has finally returned to around pre-crisis level.

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