BoE under pressure as UK economy grows

British economic growth got back on track in the second quarter but the strength of the pound hurt manufacturers, putting the Bank of England in a tricky spot as it gets closer to raising interest rates.

The UK economy grew by 0.7% in the three months to June, Britain’s Office for National Statistics (ONS) said yesterday, in line with forecasts and above the long-run average. It followed an unexpected slowdown to 0.4% in the first three months of 2015.

But the figures showed an increased reliance on domestic demand, with business and financial services powering ahead, while factory output suffered a rare quarterly fall.