The Pound has made gains against all of its most traded peers after official data showed that the UK’s economic output expanded at its strongest pace in three years.
According to the Office for National Statistics (ONS) the UK’s GDP expanded by 0.8% in the third quarter of the year, up from the 0.7% expansion recorded in the second quarter. The increase matched economist forecasts and boosted expectations that the Bank of England will have to concede that interest rates may have to rise earlier than it previously predicted.
Some economists believe that Friday’s estimated data could be revised upwards at a later date.
ONS chief economist Joe Grice said that third quarter GDP was depressed by a fall in oil and gas output. Without that fall, GDP would have grown by 1%, he said.
The report showed that the UK service sector has made a full recovery by growing by 0.7% and is now 0.4% stronger than it was prior to the downturn. Manufacturing is 8.9% below it and construction is 12.5% lower than pre-downturn levels. One bright spot for the construction sector was that it had expanded by 2.5% over the quarter, its second consecutive quarter of growth.
Chancellor of the Exchequer George Osborne said in a tweet: “This shows that Britain’s hard work is paying off and the country is on the path to prosperity.”
The ONS’s preliminary estimates of GDP are among the first released in the European Union, and are based partly on estimated data. On average, they are revised by 0.1% points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.
As a result of the GDP report the Pound firmed against the Euro and US Dollar and furthered its gains against the Australian and New Zealand Dollars.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6216 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1735 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6913 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9529 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6165 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8519 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5911 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5119 <
(As of 10:00 am GMT)
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