-Peter Hemington, partner at BDO
Further signs that Britain's economy is gathering pace emerged on Monday, as a bunch of economic data reported a gain in jobs placement, increasing output and improved confidence in the manufacturing sector. According to a survey conducted by the accountancy firm BDO LLP, a gauge of company output expectations surged to 94.4, the highest since June 2012 and up from 94.1 in the preceding month. At the same time, business confidence index jumped to 93.6 in May, compared with 93 in April, while a measure of employment intentions increased to 96.6 from 94.4. Despite the overall improvement, the output index is still remaining below the 95 threshold level that points to positive growth one quarter ahead.
During the last week's policy meeting, the Bank of England refrained from more stimulus measures as Governor Mervyn King suggested there are signs of economic recovery. The U.K. economy expanded at stronger than expected pace of 0.3% in the first quarter, and the latest data and surveys are adding to further evidence the recovery is continuing. Nevertheless, growth remains fragile, with lending by domestic banks declining in the first three months even despite an extension of the BoE's Funding for Lending Scheme.
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