Preliminary UK Q2 GDP Confirms Slowing Economy
Today's preliminary Q2 GDP report from the UK showed real growth slowing to 0.2% on the quarter and 1.6% on the year, the weakest in three years and down from 0.3% and 2.3%, respectively, in Q1. A marked fall in construction output, the result of weakness in private house building, was largely to blame - down 0.7% on the quarter. However, the slowdown in the dominant service sector was also notable, with growth of just 0.4% on the quarter and 2.1% on the year, the weakest annual growth in 16 years.
This report will add to expectations that the Bank of England's Monetary Policy Committee will leave interest rates on hold for the next few months.
Easing Credit Growth in Euro-zone
Today's ECB data on credit and money supply showed that the pace of loan growth to the private sector is easing, coming in at 9.8% on the year in June, versus 10.5% in May.
In addition, the headline rate of growth in M3 money supply fell to an annual 9.5% in June from 10.0% the month before.
While the pace of credit and monetary expansion is still high for a slowing economy, the fact that they are easing all-but guarantees that the European Central Bank (ECB) won't be making any more rate hikes in the second half of this year.