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Vicky Price: Business Correspondent says UK's GDP is better than expected in Q1 · Early Edition with Ryan Bridge

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  Speaker 1: It's going to Vicky Price, our business correspondent this morning. Vicky,
• 0:03
  Speaker 1: good morning, good evening to you.
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  Speaker 2: Good morning.
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  Speaker 1: So UK GDP and Q one bitter than expected.
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  Speaker 2: Well, yes, I've just been hearing you talk about your
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  Speaker 2: actual data, which didn't sound too good. But what we
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  Speaker 2: did see here was in the UK was an increase
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  Speaker 2: of point six percent in the quarter in GDP, which
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  Speaker 2: is quite unexpected. However, if you look at the monthly figures,
• 0:28
  Speaker 2: we had no growth in January, then we had zo
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  Speaker 2: point four percent in February, then we had point three
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  Speaker 2: percent in March, so you're beginning to think, oh my god,
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  Speaker 2: what's going to happen next. But r PMI figures for
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  Speaker 2: both April and what looks like possibly in Mail so
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  Speaker 2: look a little bit better. Certainly, the April data show
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  Speaker 2: an expansion, a much greater expansion than had been anticipated,
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  Speaker 2: both in services and in the production sectors too. Not
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  Speaker 2: so much in construction, which is suffering, but in the
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  Speaker 2: other two and there are also reasons for it, and
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  Speaker 2: we think a lot of that has to do. I mean,
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  Speaker 2: first of all, very nice weather in April, so lots
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  Speaker 2: of people went out. The tech sectors doing well generally
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  Speaker 2: and also on the production side, an awful lot of
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  Speaker 2: you know, doing things now and maybe putting things into
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  Speaker 2: a sort of inventory in a way in case there
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  Speaker 2: are any serious supply constraints in the future or prices
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  Speaker 2: go up even more. So there's a little bit of
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  Speaker 2: that which we have seen actually happen in other countries
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  Speaker 2: as well, so we're not unique in that. But the
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  Speaker 2: question is what happens next?
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  Speaker 1: Absolutely what about the Stama drama, the leadership troubles, big
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  Speaker 1: impact they're on the bond markets right, Well, yes.
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  Speaker 2: I mean what we've seen is that there are now
• 1:43
  Speaker 2: some resignations from the cabinets, so the Health secretary has gone,
• 1:47
  Speaker 2: and there is a possibility of someone new entering Parliament
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  Speaker 2: who is now the mayor in Greater Manchester and he
• 1:55
  Speaker 2: comes in he will challenge Kirstamas so Kistama the Prime minister.
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  Speaker 2: So yes, huge volatility here. We don't know what's going
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  Speaker 2: to happen next. And what's happening of course in the
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  Speaker 2: bond market is that that type of insecurity is not liked.
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  Speaker 2: So our ten year bond yield has gone up to
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  Speaker 2: over five percent and that's a real concern because it
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  Speaker 2: affects mortgages and everything else. However, I think we've all
• 2:18
  Speaker 2: felt and you'll be feeling it too, that the oil
• 2:21
  Speaker 2: price has been also particularly important in that regard, because
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  Speaker 2: whatever's going on right now, the latest President Trump have
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  Speaker 2: meant that oil prices have gone up over the last
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  Speaker 2: of this weekend. Really that in your case, of course,
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  Speaker 2: Monday morning you'll see this in the figures to nearly
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  Speaker 2: one hundred and ten dollars a barrow for Brent crude,
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  Speaker 2: and that of course affects views on inflation and up
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  Speaker 2: to a point, bond yields are affected by that, and
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  Speaker 2: also what they think perhaps interest rates will do the
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  Speaker 2: central bank interest rates ahead if we get into this
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  Speaker 2: really higher inflation environment and stay there for some time.
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  Speaker 1: Yes, and we saw that the inflation for Europe for
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  Speaker 1: April was up. UK getting data. Is it this week?
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  Speaker 2: It is, It's on Wednesday, so we'll see that, and
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  Speaker 2: of course everyone will be watching that very carefully, because
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  Speaker 2: of course we did see an increase to three point
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  Speaker 2: three percent in the in March, and really the April
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  Speaker 2: figures which have already come out from Europe suggests quite
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  Speaker 2: a substantial increase. And we remember that Europe has had
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  Speaker 2: periods of below target inflation below two percent, well that's
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  Speaker 2: no longer happening, and everyone is thinking that the European
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  Speaker 2: Central Bank will raise rates a couple of times in
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  Speaker 2: the rest of twenty twenty six. It could be more,
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  Speaker 2: but we know that they're very concerned about growth, so
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  Speaker 2: that they might think about it twice or three times.
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  Speaker 2: See what happens really. But here in the UK again,
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  Speaker 2: we haven't seen an increase in rates yet, but if
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  Speaker 2: that inflation out looked seriously worse since then the markets
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  Speaker 2: are braced for that as well.
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  Speaker 1: Vicky, good to have you on the show. As always
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  Speaker 1: for a Monday morning Vicki Price our Business Chorus for
• 4:01
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