Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

UK economy stumbles, casts doubt on rate hike

Friday, July 07, 2017 - 01:31

Brexit is back on Britain's front burner again as UK industry and trade disappoint in May, adding to questions over the economic outlook. It comes as the country's main industry lobby, the CBI, calls for Britain to stay in the EU's single market in order to avoid an economic 'cliff edge'. Ciara Lee reports.

▲ Hide Transcript

View Transcript

Struggling to gain momentum. Output by British factories and the construction sector unexpectedly shrank in May, prompting sterling to hit a ten day low in Friday trade. That on top of weak spending by consumers who are feeling the pinch from accelerating inflation since the Brexit vote. It all raises questions about the chances of the Bank of England raising interest rates this year. The signs of continued weak growth came as the CBI employers' group pressed the government to negotiate a smooth Brexit. Calling for Britain to stay in the EU's single market for a transition period. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "What the CBI but also the Chambers of Commerce, the organisations that they represent, the small businesses. They are all saying the same thing now, which is that we can't really trade properly unless we have the ability to trade without all those controls and all this costs." All eyes will be on official data on wages next Wednesday. That's expected to be critical for Bank of England policymakers as they mull whether to raise interest rates from their record low. Britain may be suffering - but for France, the Brexit fallout is an opportunity. It's launched an offensive to lure banking business potentially displaced by Britain's divorce from the EU. The government is to remove some of the charges banks pay in France and make sure they are not over-regulated compared to European peers.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

UK economy stumbles, casts doubt on rate hike

Friday, July 07, 2017 - 01:31