Britain’s booming... Manufacturing up as China eyes trade deal

Britain’s economy has picked up pace despite doom-laden warnings over the prospect of Brexit.

Figures yesterday showed the recovery is in far better shape than feared with industry clocking up its fastest rate of growth for six years.

industrial production rose by 1.9 per cent in the three months to May, according to the Office for national statistics – the strongest performance since the three months to May 2010.

and in a sign that Britain can prosper outside the EU, an indian business leader described a trade agreement with the UK as a deal ‘almost made in heaven’.

Chinese officials have also made encouraging noises, claiming the Brexit vote has made a trade deal with Britain more likely.

the economy looks set to get a further boost next week with analysts saying there is a near 80 per cent chance that interest rates will be cut once again. rates have been at an historic low of 0.5 per cent since March 2009, but it is now thought the Bank of England will cut them to 0.25 per cent on thursday to keep the economy moving. talk of rate cuts came as the FtsE 100 index rose 1.1 per cent yesterday and government borrowing costs hit a record low, in a sign that international investors still have faith in the UK fol- lowing Brexit. the Government borrowed £2.25billion for ten years and will pay less than 1 per cent a year.

‘the prophets of doom have run out of steam today,’ said David Buik, market analyst at stockbroker Panmure Gordon.

the national institute of Economic and social research said gross domestic product – the total size of the economy – increased by 0.6 per cent in the second three months of the year.

that marks an improvement on the 0.4 per cent expansion seen in the first quarter of 2016 – allaying fears that uncertainty over the EU referendum damaged the UK economy.

the reports will ease concerns that the economy is heading for the rocks. Edward Firth, an analyst at investment bank Macquarie, said: ‘We are

‘A deal almost made in heaven’

highly sceptical that being a member of a command and control organisation like the EU offers significant benefits or that departure will throw us straight back to the 1970s.’

But the institute also said that while growth was ‘robust’ in the second quarter it expects a ‘quick deterioration’ in the coming months.

and in a report published today, research group GfK warns that consumer confidence has fallen at its fastest pace for 21 years following the Brexit vote.

However, naushad Forbes, president of the Confederation of indian industry, said negotiations over an india-EU trade agreement, which had lasted for nine years, were being held up by concerns about European exports of wine and cars.

But those problems would be removed if the UK negotiated its own arrangement after leaving the EU. ‘it would be an agreement that would be almost made in heaven,’ he said.

Zing Houyan, an official from the state-backed Chinese academy of international trade and Economic Cooperation, said China was being frustrated by the EU.

But now Britain is leaving the EU the ‘situation in Western Europe will push China and the UK to make a trade treaty’, he said.

trade Minister Lord Price said on Wednesday that Brexit could herald a ‘second Elizabethan Golden age’ of trade and investment.