Gautam Batra, Chief Investment Officer, Signia Wealth, comments on the UK’s Q2 GDP figures…

The upward trajectory of growth for 2013 received further validation today as second quarter growth has settled at 0.7%, which clearly supports increasing confidence in the UK economy. Growth figures have benefitted from surprisingly positive Government spending in the quarter in conjunction with a higher contribution from net exports and resilient consumer spending.
 
But as we look ahead, investors should question whether this level of growth is sustainable. Whilst economic momentum has carried over into the third quarter, we expect to see a weaker contribution from trade and lower consumer activity due to a potential reduction in credit impulse and a lower level of savings into the New Year.  Generally less robust economic growth suggests one should adopt a cautious approach towards Sterling for the rest of the year.