- UK set to outperform among major economies in the coming months
- The UK’s ECI stands at 1.09, higher than eurozone and the US, signalling strong demand.
- UK was the fastest-growing economy in the G7 during the first half of the year
- Recent UK growth is driven by stronger domestic demand, boosted by lower inflation and steady wage growth.
UK set to outperform major economies in the coming months
Analysts at Panmure Liberum believe the UK will outperform other major economies in the coming months, thanks to stronger domestic demand.
In a report released today, the firm discussed its Early Cycle Indicator (ECI), a tool that predicts economic performance. The ECI uses data from PMI surveys to compare new orders with existing inventories, showing the strength of incoming demand. A score above one signals strong demand.
The UK’s ECI is at 1.09, higher than both the eurozone and the US. This number has steadily improved since hitting 0.80 last August.
Recent PMI data shows the UK saw growth in output and new orders in August, unlike the US and other major European economies.
Analysts noted that while export demand has been “challenging,” domestic factors like lower inflation and easier financial conditions are driving growth.
The UK was the fastest-growing economy in the G7 during the first half of the year, defying expectations of slow growth.
Surveys suggest the UK economy will keep growing, though at a slower rate than earlier in the year.
This recovery has been largely fueled by increased consumer spending power, as inflation eases and wages remain strong.