June’s stronger-than-expected UK GDP print reflects a resilient services sector but fails to shift BoE rate hike expectations.
The UK economy grew 0.3% month-over-month in June, exceeding forecasts of a 0.1% contraction, as the services sector expanded 0.4%. May’s GDP was revised to flat, leaving June as the sole positive month in the second quarter.
Quarterly growth reached 0.4%, marginally above the Bank of England’s 0.3% projection but in line with market expectations. Analysts note the uptick stems partly from Q1 strength and does not signal a sustained growth trend.
Despite the surprise, policymakers are unlikely to view the data as justification for near-term rate hikes, given lingering caution among Monetary Policy Committee members.