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EnglishپارسیEnglishپارسیThe Bank of England kept its benchmark interest rate steady at 5.0%, following a rate cut last month. With inflation in the services sector running hot at an annual rate of 5.6%, this decision was widely anticipated by market participants.
The BoE MPC members voted 8-1 in favor of holding the rate unchanged, exceeding the 7 votes expected. The vote for a rate hike matched the forecast with 0 votes. Meanwhile, 1 member voted for a rate cut, compared to the 2 votes that were anticipated.
UK CPI increased by 0.3% month-over-month in August, holding steady at 2.2% annually, as expected. Core inflation also grew, aligning with estimates of 3.6%. These figures indicate that the UK central bank has successfully achieved its set targets.
However, the higher growth compared to the previous month may prompt the central bank to adopt a more cautious approach, likely keeping interest rates unchanged at tomorrow’s monetary policy meeting.
According to the latest data published by the Office for National Statistics (ONS), with no growth over the month in July and repeating the June proformance, UK Economy missed the monthly 0.2% GDP growth.
On trade front, UK Total Trade Balance of £-7.514B in July, was weaker than £-5.324B tarde balance in June. Non-EU down trade balance also fell to £-7.5B in July from previous £-7.455B.
United Kingdom Industrial Production in July fell by 1.2% (YoY), better than deopping by 1.4% in June, but missed the forecasts (-0.2%).On the monthly basis (MoM), Industrial Production fell by -0.8%, compared 0.3% groeth expectations.
United Kingdom Manufacturing Production on the monthly basis (MoM) in July, printed at -1%, below expectations (0.2%) in July, and in annual scale (YoY) registered at -1.3%, also below the -0.1% expectations.
The United Kingdom's S&P Global/CIPS Manufacturing PMI for August stood at 52.5, in line with both the July figure and market forecasts.
The Purchasing Managers' Index (PMI) for the service sector increased to 53.3 in August, up from 52.8 in July, exceeding expectations of 52.8.
The PMI for the manufacturing sector also rose to 52.5 in August, compared to 52.1 in July and surpassing market forecasts.
The composite PMI, which includes both services and manufacturing, increased to 53.4 in August from 52.8 in July, beating expectations of a rise to 52.9.
In July 2024, UK retail sales grew by 0.5%, a rebound from the 0.9% decline in June but still falling short of forecasts. On an annual basis, retail sales increased by 1.4%, recovering from the previous month's 0.3% drop.
Core retail sales, which exclude auto and fuel sales, rose by 0.7% in July, following a 1.3% decline in June. Annually, core retail sales grew by 1.4%, up from a 0.8% decrease the month before.
GDP: Grew by 0.6% quarter-over-quarter and 0.9% year-over-year in Q2, aligning with forecasts.
Goods Trade Balance: Reached a deficit of £18.89 billion in June, higher than the expected £16 billion.
Trade Deficit with Non-European Countries: Rose to £7.46 billion in June, up from £6.856 billion in May.
Total Trade Balance: Widened from a deficit of £4.894 billion in May to £5.324 billion in June.
Industrial Production: Decreased by 1.4% year-over-year in June but increased by 0.8% month-over-month, better than the expected 2.1% decrease and 0.1% increase, respectively.
Factory Production: Fell by 1.5% year-over-year and grew by 1.1% month-over-month, also outperforming expectations of a 2.4% decrease and a 0.1% increase.
In July 2024, the UK saw a slight easing in consumer inflation, with a monthly growth of 0.2%, compared to 0.1% in June. Annually, consumer inflation rose by 2.2%, just below the expected 2.3%, though it did increase from 2.0% in the previous month.
On the producer side, inflation fell by 0.1%, a smaller decline than the 0.3% decrease that was anticipated, following a 0.4% drop in June. These figures indicate a mild moderation in inflationary pressures within the UK economy.
The United Kingdom's unemployment rate fell to 4.2% from April to June 2024, down from 4.4% in the previous period and below market expectations of 4.5%.
🔺 The PMI of the British service sector was recorded at 52.5 in July. This figure was better than the 52.1 in June and the 52.4 expected by analysts.
🔺 With the growth of the service sector, the composite PMI also increased to 52.8. This index was recorded at 52.3 in the previous month, and market participants expected it to grow to 52.7.
The Bank of England cut interest rates from a 16-year high on Thursday. In the first reduction since the pandemic, BoE MPC members cut the rates by 25 basis point to 5.0%, as widely expected.
Policymakers voted 5 to 4 to cut the cash rate after U.K. consumer price inflation returned to the BOE's 2% target in May and stayed there in June.