Analysts at Nomura point out that the goods trade deficit of UK improved by just over £1bn between May and June thanks to a combination of an improving underlying deficit and a larger erratics surplus, only partly offset by a fall in oil exports.
Key Quotes
“There is a risk of a wider deficit in July if the 6.4% rise in exports over the past two months reverses.”
“Monthly GDP: Because of the strong start to the May-Jul quarter (which was generated by growth in the single month of May of 0.3% m-o-m) it means that it is quite easy to see a 0.5% print on the non-overlapping quarterly growth rate (that is, growth of 0.5% in the May-Jul period relative to Feb-Apr). All we would need for that is for GDP not to decline by more than 0.1% during the month. And should GDP rise by 0.2% then that would be enough to push the quarterly rate of growth to 0.6%.”
“Industrial production: These figures have, in their own right, become a little less interesting to the markets of late because the new monthly GDP figures are published on the same day. While the surveys remain consistent with a small increase in manufacturing output in July, there is a risk of a negative print after the past two months of growth (a rise of more than 1% over that period).”
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