Mortgage News
UK achieves 1.1% growth in Q2
Growth across all business sectors from March to June shows the UK is exceeding expectations by making a speedier recovery than expected.
Gross Domestic Product (GDP) increased 1.1% in the second quarter of 2010, compared to an increase of 0.3% in Q1.
Business and financial services led the recovery in the services sector, where growth rose from 0.3% the previous quarter to 0.9% in Q2.
Robert Sinclair, director of AMI, said: “Although financing is still tight and lenders are still applying tight criteria to mortgage lending, the other end of the situation is that consumers are showing a greater degree of confidence.”
This growth could emerge from any part of a sprawling financial service sector, said Sinclair, and mortgages or retail are still a tiny part of that.
British Bankers’ Association (BBA) data, also released on Friday, shows mortgage approvals for purchases fell back to their lowest numbers in a year to 34,813.
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RICS chief economist Simon Rubinson, said that in his opinion, this does not strengthen the case for a base rate rise.
“We are unconvinced of the merits for such a move, despite the robust second quarter data and believe this will be the high water mark for quarterly growth in the economy with fiscal tightening set to bite as the year draws to a close.”