Following the latest UK GDP figure for July, Marcus Brookes, chief investment officer at Quilter Investors has commented.
He said: “Rather surprisingly UK growth bounced back in July after a disappointing figure in June, easing concerns that a recession is on the immediate horizon. Services saw a month of positive growth, boosted by the Women’s Euros and the Commonwealth Games, while production and construction fell. However, given this data is from July, the outlook could be bleaker given it comes before a potential slowdown in activity during the period of mourning in the UK.
“Today’s positive figure is unlikely do much to change the Bank of England’s thinking. The general consensus is that the Bank of England will continue on its path of increasing rates at its delayed Monetary Policy Committee meeting next week, which will likely follow a further rise in inflation later this week, which will only serve to reaffirm this. The BoE continues to face the incredibly difficult task of guiding the country through this uncertain period, and all eyes will be keenly watching as it makes its next move.
“Positively, 2023 UK GDP forecasts were raised last week after the government announced its plan to freeze energy bills for two years which is expected to lead to a shallower recession and reduced near-term inflation. However, it is also likely to see interest rates pushed higher than originally expected.
“Ultimately, the next few months are still likely to be a very difficult environment for everyone – governments, corporates and households alike. Quality businesses continue to be those likely to do best during this challenging time, and for investors this may be an area they wish to explore to help them navigate this tricky period.”