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Vicky Pryce: business correspondent on the UK GDP going up by 0.4 percent · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Right now, let's go to Vicky Price, our business correspondent. Vicky,
• 0:03
  Speaker 1: nice to have you. UK GDP doing better. You're up, what,
• 0:06
  Speaker 1: 0.4 in July?
• 0:09
  Speaker 2: Yes, that was quite a surprise.
• 0:11
  Speaker 3: Most economists expected there would be absolutely no increase in
• 0:14
  Speaker 3: GDP at all in the month. But what nobody had
• 0:17
  Speaker 3: anticipated was that, in fact, there are some sectors that
• 0:20
  Speaker 3: are doing better than forecast. And suddenly they've sort of
• 0:24
  Speaker 3: sprung into life. And a lot of them have to do,
• 0:26
  Speaker 3: I'm afraid, with AI. Quite a lot of investment going
• 0:29
  Speaker 3: on in data centres. And then you've also had general
• 0:33
  Speaker 3: scientific research. research activities going on, all linked, if you like,
• 0:39
  Speaker 3: to the technological developments that are happening all around us.
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  Speaker 3: So that seemed to have kept things going. And then
• 0:44
  Speaker 3: one other factor, which has been, of course, the World Cup,
• 0:48
  Speaker 3: but not so much in terms of people spending in
• 0:51
  Speaker 3: pubs and restaurants, although there was a certain amount of that,
• 0:54
  Speaker 3: but nothing like as much as expected, but more.
• 0:57
  Speaker 2: All the media around it.
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  Speaker 3: So a lot of advertising that, of course, was going on,
• 1:01
  Speaker 3: people watching on television and And that has also boosted
• 1:05
  Speaker 3: that sector quite significantly.
• 1:07
  Speaker 2: So that's where we are. A bit of a surprise.
• 1:09
  Speaker 2: And of course, it means quite a lot in terms
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  Speaker 2: of what the Bank of England may decide to do
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  Speaker 2: when they meet this week on interest rates, because faster
• 1:15
  Speaker 2: growth may make them think, well, perhaps we need to
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  Speaker 2: raise rates, although the market generally does not expect them
• 1:23
  Speaker 2: to do so.
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  Speaker 1: But they are expecting more this year, right? So does
• 1:27
  Speaker 1: it bring the potential for that to come forward a
• 1:29
  Speaker 1: little bit if you've got oil prices going up and
• 1:31
  Speaker 1: you've got growth looking relatively well better than you thought?
• 1:35
  Speaker 3: Yes, I think the likelihood of increases in interest rates
• 1:39
  Speaker 3: have now gone up. So the market is pricing possibly
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  Speaker 3: increases by the end of the year and a few
• 1:45
  Speaker 3: in 2027, I'm afraid, if things continue as they are,
• 1:48
  Speaker 3: because there's no doubt that inflation is increasing. I mean,
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  Speaker 3: we've seen what's going on in other parts of the world.
• 1:54
  Speaker 3: The ones very close to us, of course, the European
• 1:56
  Speaker 3: Central Bank did raise inflation. interest rate just last week.
• 2:00
  Speaker 3: And they did make it very clear that they expected
• 2:03
  Speaker 3: inflation to be continuing its way up and that they're
• 2:07
  Speaker 3: going to be thinking each time, you know, what is happening,
• 2:11
  Speaker 3: data dependent, as they said, in terms of their decisions.
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  Speaker 2: But they are still quite low. So at 2.50%, the
• 2:17
  Speaker 2: ECB is more than 1% below us. We are at 3.75%.
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  Speaker 3: And then, of course, you've got The Fed in the U.S.
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  Speaker 3: making a decision this coming week, so in the next
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  Speaker 3: few days. So it's all happening at the same time.
• 2:35
  Speaker 3: Whether the Bank of England will be able to resist
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  Speaker 3: raising rates will be very interesting to see.
• 2:39
  Speaker 1: Certainly will be. Vicky Price, business. Good to have you
• 2:42
  Speaker 1: on as always for a Monday morning.
• 2:44
  Speaker 2: For more from Early Edition with Ryan Bridge, listen live
• 2:47
  Speaker 2: to News Talk ZB from 5 a.m.
• 2:49
  Speaker 1: Weekdays or follow the podcast on iHeartRadio.