Summary:
-
UK GDP M/M: -0.1% vs 0.0% exp.
-
Prior revised up by 0.1% to +0.4%
-
GBP remains near recent lows
The most recent GDP readings from the UK have shown a contraction in month on month terms but taking a step back and looking at the bigger picture it doesn’t appear quite so bad. The August decline in m/m terms can be explained away by an upwards revision to an already strong July reading and a rolling 3-month average showed an increase of 0.3%. Following the contraction seen in the second quarter this means that another negative reading for Q3 is not at all likely, although growth remains tepid at best. The ONS also stated that they have received no anecdotal reports of Brexit preparations affecting the August metric.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appWhile it may not make the same headlines as the GDP read, the latest manufacturing and industrial production reads perhaps offer greater insight into the health of the UK economy here, with sharp contractions seen in each coming as another warning sign.
While economic data shouldn’t be dismissed entirely it is very much of secondary importance to the markets at present with Brexit uncertainty continuing to loom large overhead. A lunch between UK PM Boris Johnson and Irish Taoiseach Leo Varadkar is a welcome development for those hoping for some progress but given the recent rhetoric the chances of any real progress seem to be slim to none.
There’s been minimal market reaction to this batch of data with the pond still treading water around the $1.22 mark and trading not far from its lowest level in 5 weeks. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
