"It's encouraging to see some decent signs of recovery in manufacturing and housing, and overall it looks like the economy may have expanded at a faster rate in the second quarter"
- Samuel Tombs, an economist at Capital Economics Ltd.
Britain's manufacturing sector expanded at the fastest pace in almost two years, while mortgage approvals surged more than expected, adding to evidence the recovery is on track. On Monday July 1, the data from Markit Economics and the Chartered Institute of Purchasing and Supply showed that a factory gauge jumped to 52.5 in June, compared with 51.5 recorded in May, above the 50 benchmark and outpacing analysts' expectations of a 51.3 reading. Moreover, new orders at the nation's manufacturers rose for a fourth consecutive month in June, while input costs dropped for a third month, pointing at overall stabilization in the sector. The recent data come as Mark Carney steps in as the BoE's Governor, and is likely to leave the monetary policy unchanged at a meeting scheduled on July 4.
Also Monday, a report from the Bank of England unveiled statistics about the number of mortgages approved in May. According to data the U.K. property market improved further, as the number of mortgage approvals rocketed up to 58,242, reaching the highest level since December 2009, and higher from previous month's 54,400. The May's reading reflects encouraging signs of a substantial improvement of the U.K. property market, meeting central bank's forecasts, which expected stronger lending during the second quarter of a year.
© Dukascopy Bank SA