Positive growth creates space for BoE aggression
GDP grew 0.2% in April, following a 0.3% fall in March
GDP grew 0.1% over the three months to April
Economic expansion was driven by 0.3% growth in Services sector
Construction grew by 0.6%
Production fell by 0.3%
GDP had been expected to rise 0.2% (Trading Economics)

Nicholas Hyett, Investment Analyst, Wealth Club:

“The services sector continues to set the tone for the UK economy, growing 0.3% in April – driven by vehicle sales and repairs together with an uptick in the tv, film and music industries. In production it was advanced manufacturing that suffered, with declines in pharmaceutical and computer/electronic products, while private housing work held back construction.

However, more important than monthly shifts in the economy is what the numbers mean for the future direction of interest rates. With wages and prices continuing to rise the Bank of England is expected to raise rates further to stem inflation. GDP growth, albeit modest, creates the space for the Bank of England to be more aggressive in its rate hikes. The chances of a 0.5% rate hike just got higher.”