By TraderVox.com
Tradervox.com (Dublin) – Signs that Britain is out of a double-dip recession were confirmed by a report showing that the economy expanded at the strongest pace in five years as Olympic ticket sales and an increase in services aided the economic rebound. According to the Office for National Statistic, the Gross Domestic Product rose by one percent in the third quarter. This is the fastest rate since 2007, according to the institution’s data. The data beat the market forecast of 0.6 percent and caused the pound to strengthen against major peers.
The data from the Office for National Statistics indicated that the rebound was as a result of Olympic ticket sales and the surge in services. The statement from the office also noted that the rebound from the second quarter, which was affected by an extra public holiday, is indicative that the economy is healing from the effects of troubles in Europe. Despite the temporary relieve that this data will give to the Prime Minister, David Cameron, the Bank of England Governor mervyn King has noted that the advanced is slow and uncertain. The market is still watchful of the fundamental weaknesses that might warrant further stimulus.
According to James Shugg, who is a London-based economist at Westpac Banking Corp, there are concerns that the Britain’s economy will remain flat throughout the year, adding that the progress in the economy will depend on who rigidly the government is determined to remain committed to its deficit reduction plan. The surge in the GDP was caused by the 1.3 percent leap of the UK services that constitute about three quarters of the GDP. The ONS data indicated that the Olympics tickets sales amounted to 0.2 percentage points of the GDP.
After the release of the data, the pound advanced against the dollar to $1.6134 at the morning session in London, before closing the day at 0.6 percent up from the previous day close.
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