Strong domestic demand is lifting UK growth, according to new figures out this morning, yet fears over global headwinds are knocking confidence in the economy.
Lloyds Bank’s purchasing managers’ index – a survey of businesses – climbed to a score of 57.5 in June from May’s 55.9, new data reveals today. London led the regions with a score of 60. Scores above 50 signify growth, with higher scores marking faster expansion.
UK consumers are particularly confident and are spending more on going out, according to separate figures from credit card giant Visa.
Total expenditure was 1.4 per cent higher in June than in the same month last year, Visa said, while spending on recreation and culture jumped 5.8 per cent.
Yet turbulence in some of the UK’s major export markets is impacting business confidence, according to a survey by accountants BDO.
BDO’s business confidence index dropped to a score of 103.9 in June from May’s 104.5. Its long term average is 100.
Confidence fell sharply in the manufacturing sector, which registered a score of 98.5 from 103.4.
There were worries over the Eurozone economy as officials continue to seek a solution the economic crisis in Greece.
China is also a concern. The giant Asian economy is expected to see growth slow to seven per cent this year, while a stock market rout has resulted in shares losing a third of their value since a 12 June peak.
“The UK thrives by being an outward looking economy, so to see the dynamo that is the Chinese market slowing down is clearly playing on the minds of exporters,” said BDO partner Peter Hemington.
“Our exports market is a key strength of the UK economy. We need to do all we can to maximise its potential in growing and re-balancing our economy as a whole.”