The further decline in the trade deficit to a six-month low of $40.5bn in July, from $40.8bn the month before, suggests that net external trade will make a larger positive contribution to third-quarter GDP growth than we had expected, perhaps adding between 0.5 and 1.0 percentage points. Accordingly, we are raising our third-quarter GDP growth forecast from 3.0% annualised to 3.5%.
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