Gross Domestic Product Figures Show Growth for The UK – GBP Exchange Rates
This morning UK Gross Domestic Product (GDP) figures were revised to 0.7%, exactly the same level they had already been confirmed as, so not much of a revision! However, this figure means that the UK economy continues to show growth although it does mean that in the last quarter of 2013 the economy grew less than it did in quarter 3 of 2013 which shows we are slightly on a downward trend. So, when the GDP figures for the first quarter of this year is announced next month it will be an absolutely key data set as it will highlight how the economy is performing this year and whether the growth in the economy is slowing or whether last quarter was just a blip and instead we are back on the path to recovery. Last year GDP showed that the UK was moving further away from recession with no quarters of contraction and instead reasonably strong growth (0.4%, 0.7%, 0.8% and 0.7% for the 4 quarters of 2013) which compared to 2012 which saw several quarters of negative or no growth was a refreshing change and brought about a lot of positivity which in turn helped Sterling exchange rates push back up against most the major currencies.
So, this year, if we see GDP improve heading towards the 1% mark it may result in some further Sterling improvements and considering some of the positive economic data we have seen over the past three months I would not be surprised to see levels strengthen which in turn should help support the Pound. The recent floods may have hampered quarter 1 of this year from being considerably stronger but should inflation remain good, the housing market continue to improve, unemployment fall and the construction and retail sectors continue to pick up then we may be set for some very strong GDP figures over the course of this year.
The BBC provides a useful, interactive graph about GDP for the UK which can be seen here: http://www.bbc.co.uk/news/10613201. This quarter’s GDP is due for release at 9:30am on the 29th April so there is still plenty that could happen between now and then but I am sure that it will be one of the key announcements next month and could set the trend for Sterling exchange rates for the coming months.