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Recent figures that show a marked revival in the UK economy have their origins in the recovery in the rest of the European Union, according to Chief Investment Officer Haig Bathgate.

The CBI, in a survey of more than 800 companies, has reported that Britain's economy is growing at the fastest pace in more than year, more encouraging than official statistics which showed the UK expanded only 0.3% in the first quarter of 2015.

The turnaround for the UK has a lot to do with the stabilisation of the eurozone, where the unemployment rate has fallen to a three-year low, while for the first time since 2010 all four of the region's largest economies are showing growth.

Haig, appearing on BBC Radio's Good Morning Scotland also commented on the fortunes of Morrisons, Dixons Carphone and Entertainment One.

LAURA MACIVER

Now, to the markets - the FTSE 100 lost value in afternoon trading on Friday as concerns over Greece's ability to maintain its debt repayments returned, it finished down 0.8% at 6,984, however Glasgow based Weir Group gained 3% on positive news from North America's shale gas producers and also an upgrade by the broker Credit Suisse. In New York stock markets closed lower as figures showed the US economy shrank by 0.7% in the first quarter of the year. The S&P and Nasdaq fell and the Dow Jones dropped 0.6% closing at 18,011. Haig Bathgate of Turcan Connell is our markets guest this morning and he joins us from Edinburgh. Good morning, Haig.

HAIG BATHGATE, Turcan Connell

Morning, Laura.

LAURA MACIVER

So we're going to go first to the CBI, they've said that the speed at which the British economy is growing is increasing but this, kind of, goes against the latest official growth figures which suggested slightly slower growth, what's the CBI basing its thoughts on?

HAIG BATHGATE

Yes, it's quite an encouraging survey, as you said, saying that activity has increased markedly in May, it's a broad sample as over 800 companies surveyed, and I suppose what's particularly encouraging is that the service sector has been particularly buoyant and it's the service sector which accounts for the majority of output in the UK and that contrasts very sharply with what they reported in April which was a figure of 0.3% growth and that was the slowest it had seen in two years, so it looks as though that slowdown that we saw was quiet short lived, it's probably a sign as well that things are stabilising in Europe and in the eurozone and, of course, Europe is our biggest trading partner, so it doesn't come as any surprise to see things are beginning to stabilise and improve there that they are also improving in the UK.

LAURA MACIVER

So, the improving service sector making up for the fact that manufacturing still lagging a little.

HAIG BATHGATE

Yes, that's right, that's right and we do sell a lot of services into Europe as well so it's encouraging to see that and actually the services sector is a lot more relevant for UK growth actually than the manufacturing sector is.

LAURA MACIVER

So looking ahead to this week, Haig, Morrisons new boss David Potts faces his first AGM later in the week, he only took over in March, of course, so is he likely to get a good reception, do you think, from the shareholders and also the former Chairman Sir Ken Morrison, who doesn't hold back, does he, when he's not happy about things?

HAIG BATHGATE

Yes, a man not scared to call a spade a spade anyway. Yes, I think it's an incredibly challenging environment for retailers, more generally food retailers, and we've seen that recently with the results from Sainsbury's and Tesco, so it's coming in against a very difficult backdrop, having said that the previous CEO, Dalton Philips, made a bit of a hash of it and he couldn't really do much of a worse job that that, so I think he started from a low base, so he hopefully will avoid Ken Morrison's wrath. Although we're still expecting sales to slow, certainly nothing like the extent that we have seen in past, although it will be interesting to see what they have got to say about the general retailing environment, obviously we've got a very market-savvy consumer and customer and the discounters continue to take market share from the larger food retailers.

LAURA MACIVER

And staying with retail newly created Dixons, Carphone Group, they post trading update on Wednesday and it's expected to show decent sales for the last quarter.

HAIG BATHGATE

Yes, that's right. Again, a very difficult high street environment, however the expectation is that the merger is going to be better than expected, expecting a profit increase of over 40% and the market is expecting good results, so let's hope that they have delivered and, again, a lot of that has been driven by just basic synergies and markets share gains, but it's going to be interesting again just to see what they have got to say about the general market environment; we're starting to see sales in the industry as a whole slow a little bit, again, as the consumers are maybe a bit under pressure.

LAURA MACIVER

And an interesting story of the weekend in The Telegraph about Entertainment One, better known probably as the makers of Peppa Pig, and they are apparently considering abandoning the London Stock Exchange for New York - why is this and how would it benefit the company?

HAIG BATHGATE

Yes, that's right and it's obviously bad news for UK PLC, however there doesn't seem to be anything sinister to this. The CEO, Darren Throop, has been very complimentary about this business and tax environment of the UK, it seems to be more driven by a desire to try and widen the shareholder base. It's worth remembering that Entertainment One their roots came from a Canadian distribution company and indeed a large part of their production facilities are still based in Canada, however the main driver for this, I think, is to widen the investor base so that it appeals to a wider community.

LAURA MACIVER

So, yes, not an indictment necessarily on the business climate here in the UK.

HAIG BATHGATE

No, I don't think so, although clearly that will be the way it's portrayed in many cases, I think.

LAURA MACIVER

Haig, many thanks for joining us this morning. That was Haig Bathgate there of Turcan Connell. More business news from me at 0740.

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