The index fell slightly at the end of the month as G7 country finance ministers entered their final day of talks about economic growth and a possible deal for Greece.
New figures from the GfK showed that British business confidence was at an eight-month high in May and consumer confidence had also beat expectations. Consumer confidence had however still experienced a fall from the previous month.
The Confederation of British Industry (CBI) believes the British economy growth is ‘up several gears’. They reported a big surge in economic activity in the three months to May.
The latest official figures for the British economy, published in April, showed growth of 0.3% for the first three months of the year, the slowest quarterly growth for two years. The CBI figures are now suggesting that all areas of the economy are growing.
The latest UK Purchasing Managers’ Index (PMI) shows manufacturing growth picked up slightly in May. This was driven by a strong domestic market which helped to to offset weak overseas demand. The index from Markit rose to 52 in May from 51.8 in April.
An index figure above 50 indicates expansion, although analysts were hoping for a stronger level than this. The reading for the index in April was a seven-month low for the manufacturing sector, which has been hit by weak exports.
Company shares in China started June on a positive note, leading gains across most of Asia. This followed a survey which suggested Chinese manufacturing activity had picked up in May.
The official numbers from mainland China showed manufacturing activity in some of China’s big factories had increased slightly in May, in line with expectations from analysts. China’s official purchasing managers’ index (PMI) rose to 50.2 in May from 50.1 in April.
The British economy has tipped into deflation for the first time since the sixties, according to the latest official figures from the Office for National Statistics. Average prices, as measured by the Consumer Prices Index (CPI) measure of price inflation, fell by 0.1% in the year to April.
This followed zero inflation (or ‘noflation’) in February and March. Economists had expected price inflation to remain at zero in April. However, most agree that deflation in the UK is likely to be short-term and shallow in nature.
The latest Land Registry data shows the price of semi-detached homes rose at the fastest rate of any property type in England and Wales in the year to the end of April. According to Land Registry, the value of semi-detached houses grew by 5.6% over the past year.
This put semis ahead of flats, which rose in price by 5.4%, and detached homes, which were up 5.1%. Property prices overall increased by 5.1% during the year. As a result, the average home was valued at £179,817.
The benchmark 10 year UK Gilt yield currently stands at 1.82%, staying broadly unchanged during May. £1 buys $1.52440 or €1.39260.
The Forex Gold Index is $1,191.40/oz and the Silver Index is $16.67/oz. Brent Crude Oil Futures are currently trading at $65.12 a barrel.