Britain’s booming… Manufacturing up as China eyes trade deal: Recovery in far better shape than first thought after industry clocks its fastest growth rate for six years
Britain’s economy has picked up pace despite doom-laden warnings over the prospect of Brexit.
Figures yesterday showed the recovery is in far better shape than feared with industry clocking up its fastest rate of growth for six years.
Industrial production rose by 1.9 per cent in the three months to May, according to the Office for National Statistics – the strongest performance since the three months to May 2010.
And in a sign that Britain can prosper outside the EU, an Indian business leader described a trade agreement with the UK as a deal ‘almost made in heaven’.
Britain’s economy has picked up pace despite doom-laden warnings over the prospect of Brexit
Chinese officials have also made encouraging noises, claiming the Brexit vote has made a trade deal with Britain more likely.
The economy looks set to get a further boost next week with analysts saying there is a near 80 per cent chance that interest rates will be cut once again.
Rates have been at a historic low of 0.5 per cent since March 2009, but it is now thought the Bank of England will cut them to 0.25 per cent on Thursday to keep the economy moving.
Talk of rate cuts came as the FTSE 100 index rose 1.1 per cent yesterday and government borrowing costs hit a record low, in a sign that international investors still have faith in the UK following Brexit.
The Government borrowed £2.25billion for ten years and will pay less than 1 per cent a year.
‘The prophets of doom have run out of steam today,’ said David Buik, market analyst at stockbroker Panmure Gordon.
The National Institute of Economic and Social Research said gross domestic product – the total size of the economy – increased by 0.6 per cent in the second three months of the year.
That marks an improvement on the 0.4 per cent expansion seen in the first quarter of 2016 – allaying fears that uncertainty over the EU referendum damaged the UK economy.
The reports will ease concerns that the economy is heading for the rocks. Edward Firth, an analyst at investment bank Macquarie, said: ‘We are highly sceptical that being a member of a command and control organisation like the EU offers significant benefits or that departure will throw us straight back to the 1970s.’
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