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GDP growth may see September rate cut pared back

Journalist: John Choong (Head of Markets and Research), Newspage

ended 15. August 2024

The UK economy grew by 0.6% in Q2, as it continues to rebound from a recession in late 2024, and a strong Q1 print earlier this year. As a result, the economy grew 0.9% since this time last year, and the most in 7 quarters. On a month-on-month basis, the economy stalled in June, flatlining at 0% growth, as compared to 0.4% in May. Taking the latest two quarters of GDP growth into account and annualising them would put the UK on top of the charts as the G7’s fastest-growing economy this year (2.6%), even beating the IMF’s forecast for the US economy to grow by 2.6%.

A couple of Qs:

  1. What are your thoughts on the data and the general health of the UK economy
  2. How could this data impact the base rate (if at all)?
  3. How will could this impact the recent reductions in mortgage rates? Will we see further cuts?

1 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
The Q2 GDP data is showing strong indications that the UK economy is very much off the life support and recovering well, although this is unlikely to be felt by much of the populace. The double-edged sword however is the Bank of England could worry about growing inflation off the back of economic growth, so let’s celebrate quietly.