Latest / Best of Business / Vicky Price: Business Correspondent says UK's GDP is better than expected in Q1

Transcript

Vicky Price: Business Correspondent says UK's GDP is better than expected in Q1 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. It'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:17
  Speaker 2: It's going to Vicky Price, our business correspondent this morning. Vicky,
• 0:19
  Speaker 2: good morning, good evening to you.
• 0:21
  Speaker 3: Good morning.
• 0:22
  Speaker 2: So UK GDP and Q one bitter than expected.
• 0:26
  Speaker 3: Well, yes, I've just been hearing you talk about your
• 0:30
  Speaker 3: actual data, which didn't sound too good. But what we
• 0:33
  Speaker 3: did see here was in the UK was an increase
• 0:36
  Speaker 3: of point six percent in the quarter in GDP, so
• 0:41
  Speaker 3: which is quite unexpected. However, if you look at the
• 0:44
  Speaker 3: monthly figures, we had no growth in January, then we
• 0:48
  Speaker 3: had zero point four percent in February, then we had
• 0:51
  Speaker 3: point three percent in March. So you're beginning to think,
• 0:54
  Speaker 3: oh my god, what's going to happen next. But our
• 0:56
  Speaker 3: PMI figures for both April and what looks like possibly
• 1:01
  Speaker 3: in mail so look a little bit better. Certainly, the
• 1:03
  Speaker 3: April data show an expansion, a much greater expansion than
• 1:07
  Speaker 3: had been anticipated, both in services and in the production
• 1:12
  Speaker 3: sectors too. Not so much in construction which is suffering,
• 1:14
  Speaker 3: but in the other two and there are all sorts
• 1:16
  Speaker 3: of reasons for it, and we think a lot of
• 1:18
  Speaker 3: that has to do. I mean, first of all, very
• 1:20
  Speaker 3: nice weather in April as so lots of people went
• 1:23
  Speaker 3: out the tech sectors doing well generally, and also on
• 1:28
  Speaker 3: the production side, an awful lot of you know, doing
• 1:32
  Speaker 3: things now and maybe putting things into a sort of
• 1:35
  Speaker 3: invertory in a way in case there are any serious
• 1:37
  Speaker 3: supply constraints in the future or prices go up even more.
• 1:40
  Speaker 3: So there's a little bit of that which we have
• 1:42
  Speaker 3: seen actually happen in other countries as well, so we're
• 1:45
  Speaker 3: not unique in that. But the question is what happens next?
• 1:48
  Speaker 2: Absolutely what about the Starman drama, the leadership troubles, big
• 1:52
  Speaker 2: impact they're on the bond markets right.
• 1:55
  Speaker 3: Well, yes, I mean what we've seen is that there
• 1:57
  Speaker 3: are now some resignations from the cabinets. So the Health
• 2:03
  Speaker 3: secretary has gone, and there is a possibility of someone
• 2:06
  Speaker 3: new entering Parliament who is now the mayor in Greater
• 2:10
  Speaker 3: Manchester and he comes in he will challenge Istama, so
• 2:14
  Speaker 3: Kistama the Prime minister. So I'm afraid, yes, huge volatility here.
• 2:18
  Speaker 3: We don't know what's going to happen next. And what's
• 2:21
  Speaker 3: happening of course in the bond market is that that
• 2:23
  Speaker 3: type of insecurity is not liked. So our ten year
• 2:27
  Speaker 3: bond yield has gone up to over five percent, and
• 2:30
  Speaker 3: that's a real concern because it affects more pages and
• 2:32
  Speaker 3: everything else. However, I think we've all felt and you'll
• 2:35
  Speaker 3: be feeling it too, that the oil price has been
• 2:39
  Speaker 3: also particularly important in that regard, because whatever's going on
• 2:43
  Speaker 3: right now, the latest President Trump have meant that oil
• 2:48
  Speaker 3: prices have gone up over the last of this weekend.
• 2:51
  Speaker 3: Really that in your case, of course, Monday morning you'll
• 2:54
  Speaker 3: see this in the figures to nearly one hundred and
• 2:58
  Speaker 3: ten dollars a barrow for Brent crude, and that of
• 3:01
  Speaker 3: course affects views on inflation, and up to a point,
• 3:05
  Speaker 3: bond yields are affected by that and all so what
• 3:08
  Speaker 3: they think perhaps interest rates will do the central bank
• 3:11
  Speaker 3: interest rates ahead if we get into this really higher
• 3:14
  Speaker 3: inflation environment and stay there for some time.
• 3:16
  Speaker 2: Yes, and we saw that the inflation for Europe for
• 3:21
  Speaker 2: April was that UK getting data is it this week?
• 3:25
  Speaker 3: It is, It's on Wednesday, so we'll see that and
• 3:28
  Speaker 3: of course everyone will be watching that very carefully because
• 3:30
  Speaker 3: of course we did see an increase to three point
• 3:32
  Speaker 3: three percent in the in March, and really the April
• 3:36
  Speaker 3: figures which have already come out from Europe suggests quite
• 3:39
  Speaker 3: a substantial increase. And we remember that Europe has had
• 3:43
  Speaker 3: periods of below target inflation below two percent. Well that's
• 3:47
  Speaker 3: no longer happening, and everyone is thinking that the European
• 3:50
  Speaker 3: Central Bank will raise rates a couple of times in
• 3:53
  Speaker 3: the rest of twenty twenty six. It could be more,
• 3:56
  Speaker 3: but we know that they're very concerned about growth, so
• 3:58
  Speaker 3: that they might think about it twice or three times.
• 4:00
  Speaker 3: See what happens really. But here in the UK again
• 4:04
  Speaker 3: we haven't seen an increase in rates yet, but if
• 4:06
  Speaker 3: that inflation out looks ise Wison's, then the markets are
• 4:10
  Speaker 3: braced for that as well.
• 4:12
  Speaker 2: Vicky, good to have you on the show as always
• 4:14
  Speaker 2: for a Monday morning Vicky Price, our business correspondent.
• 4:17
  Speaker 1: For more from News Talks b listen live on air
• 4:20
  Speaker 1: or online, and keep our shows with you wherever you
• 4:23
  Speaker 1: go with our podcasts on iHeartRadio