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UK GDP: optimistic forecasts

On Thursday Great Britain is scheduled to release its preliminary Q2 GDP at 8:30 GMT. According to the consensus forecast, UK economic growth is expected to have doubled in comparison to the first quarter (Q2 forecast: +0.6% q/q, Q1: +0.3% q/q). Recent data releases, including PMis, retail sales and labor market data, show that the economy is back in positive track.

According to economists at Markit data provider, the calmer situation in the euro zone, with less immediate threat of a full-blown collapse of the single currency, had helped to restore confidence among Britain's businesses, and tempted them to start hiring and investing again. "There are signs that this time, rather than other false dawns we have had, we could see some sustained growth," they say.

Many analysts underline the improvement in the service sector. There are reasons to believe that this is true: June UK service PMI showed activity at a 27-month high. Britain's construction sector grew for a second month in June, while manufacturing recorded its strongest growth in more than two years in June, according to PMI data.

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