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Britain bouncing back

Britain bouncing back
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Further signs of economic recovery in Britain as manufacturing there grew much more strongly than expected in June.

It rose by 1.9 percent from the previous month, the fastest growth since July of last year.

Britain’s Office for National Statistics reported that all 13 components of the manufacturing index showed growth, which has not happened in over 20 years.

Economists said this offers hope the recovery is building a more solid foundation and is not just services dominated.

Britain’s economic recovery so far has relied to a great extent on higher consumer spending, helped by low borrowing costs.

Other data released at the same time showed house prices rose in July at their fastest annual pace in nearly three years and retail sales were 3.9 percent higher than a year earlier.

UK car sales, meanwhile, grew at an annual 12.7 percent for the month, prompting the trade industry group SMMT to increase its forecast for the year.

This comes as the Bank of England’s Governor Mark Carney prepares to set out the central bank’s plan for steering the UK economy back to health.

George Buckley, an economist with Deutsche Bank, said the signs of recovery might actually provide more encouragement to Bank of England Governor Mark Carney to give so-called forward guidance about future interest rates in order to prevent a rise in yields from smothering Britain’s still weak economy.

“He is likely to argue that low levels of output mean the economy is fragile, thus his desire to insulate the front-end from better growth out-turns,” Buckley wrote.

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