UK Economy Grows By 0.6%

The UK economy grew by 0.6% in the second quarter compared to the first three months of the year, according to the Office for National Statistics (ONS).

George Osborne tweeted the following reaction:

"GDP stats better than forecast.Britain's holding its nerve, we're sticking to our plan, the economy's on the mend.But still a long way to go"

However, as I always caution, when it comes to ONS statistics never trust them. They are always out of date and subject to revision.

In the meantime whilst people crack open a can of lager to celebrate the modest signs of economic recovery in the UK, let us not forget that China frets when growth bumps along at a "mere" 7%!

China's 7% Bottom Line

China's Premier, Li Keqiang, has underpinned global markets by stating that China’s “bottom line” for GDP growth is 7%, and the nation can’t let growth go below that.

Seven percent is not too shabby at all!

I would note that had a similar statement been issued by the ECB, wrt there being a bottom line for growth for the Eurozone (albeit with a bottom line of growth of far less than 7%), no one would have believed it!

Chinese Growth Falls To 7.5%

As expected China's economic growth slowed to 7.5% in the second quarter of the year.

The Chinese statistics bureau said the slowdown was partially due to deliberate efforts for structural reform and that a slower pace of growth was preferable in the long term.

Sheng Laiyun, spokesman for the National Bureau of Statistics, is quoted by the Telegraph:

"Some measures, including the intensified property tightening campaign, new rules to curb misuse of public funds and the exit some previous stimulus policies, will inevitably have some impact on growth in the short term, but they will benefit our economy in the long run."

Were this any other country such a rate of growth would be considered to be excellent.

The reality is that exceptional levels of growth, such as this, cannot continue indefinitely. Given the size of China and its economy, growth in excess of 7% isn't too shabby at all.