UK: Focus on trade and GDP data – Nomura

Analysts at Nomura point out that the UK’s goods trade deficit was at its narrowest in five months in July.

Key Quotes

“The underlying deficit actually deteriorated during the month – rather it was a £1bn improvement in the oil and erratic balances that explained the headline narrowing. Given the volatility of these components we would not be surprised to see payback in the July improvement.”

“Industrial production: Manufacturing output fell in July, but both the PMI and CBI surveys point to growth. We look for some rebound in August, therefore, even if the PMI output index did fall to its weakest for over a year in during the month.”

“Monthly GDP, Aug: GDP grew by an outsized 0.3% m-o-m in July, taking the quarterly rate (in May-Jul relative to Feb-Apr) up to 0.6% – its strongest for a year. A further rise of 0.1% m-o-m in August would leave quarterly output growth unchanged at 0.6%.”