28 Apr 2015
UK growth to rebound in Q2 – Danske
FXStreet (Barcelona) - Analyst at Danske Bank, Mikael Olai Milhøj, explains the reasons behind the bullish view on UK economy for the coming quarters.
Key Quotes
“Despite slower growth in Q1, we still expect growth to pick up in coming quarters regardless of the election outcome – albeit increased political instability and uncertainty regarding the UK’s EU membership may hurt business and consumer confidence.”
“The reason we expect growth to pick up is that the British economy is currently being stimulated by several factors.
First, British workers are experiencing positive real wage growth for the first time since 2009 due to a combination of low inflation and increasing nominal wage growth. A combination of increasing employment and positive real wage growth should support private consumption ahead.
Second, it seems growth is accelerating in the rest of Europe, which should increase foreign demand for UK goods. Higher activity in UK export markets should more than offset the negative impact of the stronger GBP in recent months.”
Key Quotes
“Despite slower growth in Q1, we still expect growth to pick up in coming quarters regardless of the election outcome – albeit increased political instability and uncertainty regarding the UK’s EU membership may hurt business and consumer confidence.”
“The reason we expect growth to pick up is that the British economy is currently being stimulated by several factors.
First, British workers are experiencing positive real wage growth for the first time since 2009 due to a combination of low inflation and increasing nominal wage growth. A combination of increasing employment and positive real wage growth should support private consumption ahead.
Second, it seems growth is accelerating in the rest of Europe, which should increase foreign demand for UK goods. Higher activity in UK export markets should more than offset the negative impact of the stronger GBP in recent months.”