GBP/USD has strengthened slightly after the Office for National Statistics released the UK’s latest GDP figures which have defied economist predictions that the figure would be revised down, but expectations for the nation’s yearly growth has been revised up.
Gross domestic product fell by 0.3 percent between October and December compared with the previous three-month period, in line with the Office for National Statistics’ initial estimate and economists’ forecasts. The ONS also added that the compared with a year ago, the UK economy was 0.3% stronger which is better than the original estimate of flat or stagnating output.
The figures show that exports fell by 1.5%, imports dropped by 1.2% and consumer spending increased by 0.2% in the final quarter of 2012. Output in Britain’s service sector – which makes up more than three quarters of GDP – dipped 0.1 percent in the fourth quarter after growing 1.2 percent in the third quarter.
Industrial output was 1.9 percent lower, the steepest fall since the first quarter of 2009. Construction (which accounts for less than 7%of GDP) expanded by 0.9%, the fastest rate of growth since the second quarter of 2011.
The GDP figures highlight the risk the UK is facing of sliding into a triple-dip recession and will be a wakeup call to Chancellor George Osborne as he prepares to deliver his budget plans for the coming year.
The Pound has weakened as a result and is expected to remain weak as investors continue to have little confidence in the UK economy.
“I don’t see why people should buy the Pound,” said John Hardy, head of currency strategy at Saxo Bank A/S in London. “Low growth, high inflation and policy outlook should continue to pressure Sterling. I need to see signs of more dynamism in the economy and signs of investment coming back to the U.K. to change that view.”
Current GBP Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading at 1.1554
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading at 1.5107
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trading at 1.4835
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading at 1.835
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading at 1.5516
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trading at 138.5024
These exchange rates were correct as of 09:55 am
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