GDP revised upwards but “UK economy has some major headwinds to face”

London - 25 May 2010

- City expert says the pressure on businesses and consumers will not abate-

The UK economy grew more than expected in the first quarter of 2010 according to official statistics released this morning. An upward revision to 0.3% from the lacklustre first estimate of 0.2% gave the pound a slight boost – up 0.04% against the euro to 1.1671.

Mark Bolsom, Head of the UK Trading Desk at Travelex Global Business Payments comments, “Our new Coalition government will welcome this news but growth remains extremely weak and tenuous. With the worry of contagion from the financial crisis in the Eurozone and swingeing public spending cuts already underway, economic recovery remains fragile.”

Bolsom concludes, “The UK economy has some major headwinds to face this year and the pressure on businesses and consumers will not abate.

“With a daunting level of national debt, rising inflation and low interest rates, I don’t think the economy will grow much past 1% this year. The real crux of whether we’re going to carry on growing depends on the extent to which the forthcoming austerity measures contract the economy. UK economic growth will be determined by events on the 22 June.”

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