UK GDP bounces back but data still soft

Summary:

• UK avoids technical recession

• Other data still points to a slowdown

• 1.2750 a level to watch in GBPUSD 

To start the week a plethora of data releases from the UK have overall painted a not too pretty picture of the underlying economy, despite growth bouncing back into positive territory following the contraction seen in the second quarter. The data was as follows:

• Preliminary GDP Q/Q read of +0.3% vs +0.4% exp. -0.2% prior

• Manufacturing production M/M: -0.4% vs -0.2% exp. -0.7% prior

• Industrial production M/M: -0.3% vs -0.1% exp. -0.7% prior - revised down from -0.6%

UK GDP bounced back into positive territory after the contraction in Q2, avoiding a technical recession. Source: ONS

While the positive GDP reading means that the UK has managed to stave off a recession for another year, there is little doubt that the economy is spluttering with political uncertainty and a slowdown in global activity clearly taking their toll. 

GBPUSD pulled back at the end of last week but the pair remains above the 1.2750 mark which has previously acted as resistance. Source: xStation