UK economy in good shape, more positive news unveiled
Hot on the heels of a week of upbeat data for the U.K. economy, a new report shows business conditions in the country rose for a sixth consecutive month in July to a high not seen since May 2011.
The BDO report on business prospects, released on Monday and calculated by taking a weighted average of the results of the U.K.'s main publicly available business surveys, shows that the economy is gathering strength across the board.
"These data indicate that the U.K.'s recovery is gathering speed and that the economy is likely to accelerate further in the third quarter of 2013," the report said.
The manufacturing sub-index rose to 98.3 in July, a significant increase on June's reading of 95.7.
The services sector, which covers over three quarters of the economy, rose to 96.5 in July, up from 94.7 in June. Both readings are above 95.0, indicating that near-term growth is expected for both these major economic sectors.
Business confidence also rose, but remained subdued compared to manufacturing output as significant risks remain, the report said.
"In particular, manufacturing exporters are struggling against weak demand from the euro zone market where the unemployment rate held steady at a record high of 12.1 percent in June 2013," it said.
Figures released last Friday showed Britain's trade deficit narrowed in June and the construction sector rebounded in the second quarter of 2013.
Last Wednesday, the bank of England raised its expectations for growth.
(Read more: BoE's Carney fails to impress with Fed 2.0)
Governor Mark Carney said the bank would not raise interest rates above the current level of 0.5 percent before unemployment had fallen to a 7 percent or lower. The move is aimed at boosting the economy and supporting a sustainable recovery.
Unemployment stood at 7.8 percent between March and May, according to official estimates.
Economists expect more good news this week, cementing the view that the U.K. recovery is gathering pace.
"July's CPI inflation figures (released on Tuesday) may confirm that last month's 2.9 percent figure was the peak, while retail sales volumes (out on Thursday) should have posted a decent rise in July," Vicky Redwood, chief U.K. economist at Capital Economics said.
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