EMU: IFO and PMI’s indicate an improvement in economic activity in the second half of the year
In July, the German IFO business climate indicator improved for the fourth consecu-tive month as the index rose from 85.9 to 87.3. The improvement was visible in the current assessment (84.3 from 82.4) and the expectations (90.4 from 89.5) sub-indices.
The advanced European PMI for the month of July also came out better than ex-pected. Both manufacturing survey (46.00 from 42.6) and the services sub-index (45.6 from 44.7) contributed to the improvement. The composite index rose form 44.6 to 46.8. While the levels in the overall indicators and in most sub-indices are still below the 50 boom-or-bust level, the data suggest that some improvement in eco-nomic activity is highly probably going into the second half of this year.
Other: UK Q2 GDP delcines more than expected
Economic activity in the UK shrank in the second quarter by 0.8% Q/Q, according to a publication of the Office for National Statistics. Economic activity declined by 5.6% compared to the same quarter last year. Output of services declined by 0.6% Q/Q, industrial production output was estimated to have fallen 0.7% Q/Q, manufacturing output declined by0.3% and construction showed a negative growth of -2.2% Q/Q. The outcome of this release was weaker than expected. The release might be impor-tant input for the BoE when it will decide whether or not to extend its QE early in Au-gust.
